Multichannel Video Services To Grow Slowly Over Next Five Years (TechWeb)
By K.C. JonesInformationWeek Fri May 16, 3:15 PM ET
Multichannel video services will continue growing in the United States over the next five years as providers increasingly compete for subscribers, according to a study announced this week.
SNL Kagan's "U.S. Multichannel Projections," covers market changes, cable's dominance, and the impact the February 2009 transition to digital television will have on multichannel subscriptions. The study forecasts moderate growth of 2.1% for all multichannel subscriptions, which are expected to reach 108.5 million by 2012.
Markets are nearing saturation, but the total number of multichannel households is still expected to increase. Multichannel subscribers should account for almost 89% of TV households in five years, according to the report.
The digital transition is expected to increase multichannel subscriptions without generating a large-scale migration, SNL Kagan said. Ten percent of over-the-air households are forecast to choose multichannel subscriptions. Cable is expected to gain most converting households, while satellite and telecommunications companies are expected to split the rest.
Still, cable providers will face increased competition from telecommunications and direct broadcast satellite services. Cable's market share will likely drop from 64% to 59% by 2012, while telecommunications companies increase their market share from 3% to 9%, SNL Kagan said.
Small-dish satellite providers will likely lose market share for failure to deliver on-demand services and bundled voice/data packages.
"Cable's ability to prevent more rapid erosion to its subscriber base will depend on the migration to all-digital services," Ian Olgeirson, SNL Kagan senior analyst, said in an announcement. "The ability to introduce enhanced services to a broader selection of subscribers and reclaim analog channels to free up bandwidth is going to prove critical to the long-term success for cable video packages."