Digital Cable Topping Satellite TV

[Chris Blount]

This year is shaping up to be a competitive one for cable and satellite, with MSO giants maintaining and building up their basic subscriber base and satellite TV planning to utilize new partnerships with regional phone companies.

Convergence Consulting Group said in its latest report for 2004 that most large cable operators - such as Comcast, Cox and Time Warner - had a better year in 2003 in terms of adding basic TV subscribers than in 2002. And 2004 also looks strong, the firm said.

In addition, Convergence Consulting Group said the satellite TV competition - DirecTV and EchoStar's DISH Network - will see a boost in subscribers from new RBOC bundles going forward, which will have a small impact on digital cable subscriber additions.

Nonetheless, digital cable will continue to slowly increase its subscriber lead over satellite, Convergence Consulting Group said in its report, "The Battle for the North American Couch Potato," out this month.

The firm said digital cable subscribers now exceed satellite TV subscribers - 23 million digital cable compared to 21.64 million satellite customers at year-end 2003. Convergence Consulting Group also said that by year-end 2005 digital cable will have more than 30.5 million digital TV subscribers and satellite TV will have more than 26 million subscribers.

At the end of 2003, 49 percent of all paying cable and satellite TV subscribers took digital, and at the end of 2005 it's estimated the percentage will reach about 59 percent. Convergence Consulting Group also said subscriber revenue reached approximately $53 billion in 2003, and estimated the revenue figure will grow by about 11 percent in 2004.

For more on Convergence Consulting Group, check out: http://www.convergenceonline.com.

http://www.skyreport.com (Used with permission)

[FTA Michael]

So digital cable will grow faster than satellite? I can believe that. As analog systems lure/force subs to upgrade to digital, that number will go up. I'd say that cable is cannibalizing its analog customers, but I'll bet digital has better profit margins.

Anyway, this doesn't address the bigger picture, which is that cable should continue to lose market share to satellite. Those percentages will level off eventually, but not this year, IMHO.

PS, Where's the glossary? MSO? RBOCs? ;)

[Cholly]

I'd like to submit a few boring comments. :) The cable industry does a better job of marketing their product than does E* or D* or V*. To begin with, they are deeply entrenched and for years have enjoyed a virtually captive market. Local channels are universally available, at no extra cost. And, there is no need for an "unsightly" dish to pick up their programming. However, when it comes to digital TV, satellite has it all over cable.
I'm a recent convert to Dish (Dish120 with HDTV package) from Time Warner digital cable service. I had been a cable subscriber for 30 years, and had digital service with an HD set top box for some ten months. The quality of TWC digital service was less than satisfactory, with considerable pixellation and freezing of the picture. Programming available was roughly equivalent to Dish180. However, of the approximately 180 channels on TWC (not including the music channels), 70 are analog, of which 5 are the local network outlets. The base monthly fee for digital cable is $60 (including one mandatory set top box), not including HDTV package, FCC access fees and taxes. Additional set top boxes are $7.95 a month. At the time I dropped TWC, the HDTV package was on a free trial basis. I believe they are charging somewhere between $5 and $8 a month additional for 6 HDTV channels.
In my limited experience, I find the Dish picture quality to be superior to cable across the board, and am willing to live with the 811 receiver growing pains.

[amit5roy5]

I have a feeling that time zones could be an issue in slowing down sattlite growth.

[garypen]

There are a number of reasons that people would choose cable over sat:

1. "Unsightly" dish. Many people don't like the look. (Plus, with E, there are often TWO dishes or the gigantic, ugly Superdish.)
2. Satellite visibility. Many do not have the correct Southern sky view, or have blockage. That's a LOT of people.
3. No place to put dish. Apartment dwellers without balconies are SOL. That's a LOT of people.
4. Local channels. Self-explanatory. Also, a LOT of people.
5. HD availability. Many Cable systems offer many more HD channels than the Sats.
6. Price. Even though the larger packages are usually more expensive than Sats, basic analog cable in multiple rooms is usually cheaper, due to outlet fees.
7. Convenience. Many homes, condos, and apt. complexes are pre-wired for cable.

There are probably more reasons. Those come to mind immediately. Of course, I chose satellite, mostly for price and HD availability. (Cable doesn't, or didn't at the time, have HD in my immediate area.)

[amit5roy5]

I would have cable, too. I chose the dish because of international programming.

[ypsiguy]

I have both Comcrap lifeline basic and Dish AT180. Dish has a better picture, period. I use Dish for all the national cable nets and Comcrap for its 9.95/month lifeline basic. In my area Comcrap is better for the locals, but Dish is better for the national cable networks.

[amit5roy5]

One problem with dish is the pixilization. If you have a big screen TV, you may notice it more than smaller (50'' and lower)

[kwajr]

well i know here the cable company has done such a great job of making people think that every time it rains you lose service and cant get locals and that it cost more and then there or those who donrt want contract but theose are the ones who will sighn a two year cell phone cointract go figure or they have had cable for like 20 yrs so what would one year hurt to try

[Cholly]

One problem with dish is the pixilization. If you have a big screen TV, you may notice it more than smaller (50'' and lower)
Interesting. I found the reverse to be true: one of the reasons I dropped cable (except for lifeline to get locals)

[garypen]

well i know here the cable company has done such a great job of making people think that every time it rains you lose service and cant get locals and that it cost more and then there or those who donrt want contract but theose are the ones who will sighn a two year cell phone cointract go figure or they have had cable for like 20 yrs so what would one year hurt to tryYou oughta trade your keyboard in for one with working period and shift keys.

[ypsiguy]

Interesting. I found the reverse to be true: one of the reasons I dropped cable (except for lifeline to get locals)

Pixelation will be a problem on all services, DBS or cable. The main C-band satellite feeds are switching over to either SA PowerVu or Digicipher2 as we speak. These systems are both MPEG-2, just like Dish's Nagravision.
I agree with Cholly. On my lifeline cable I have ESPN, but Dish's ESPN looks better. Why? Both are digital feeds and thus have pixelation, but with cable I get line amplification noise, unlike Dish. Therefore, Dish's picture is cleaner for me.
On a side note, cable still needs to be re-regulated. It is still way too big for its own good.

[Mike Richardson]

Satellite has slowly been breaking down the barriers however.

- DISH's two primary new subscriber offers, DHA and Free Dish, are both no-contract.
- DISH is also adding tons of new local markets. I think they've got over half the DMAs up, and they say that they cover like 85% of viewers with locals.
- I think that DISH is the first company to have a million DVR users (effectively, over 10% of DISH subs have DVRs.)
- DISH's new receivers such as the 322 and 522 make things cheaper by eliminating many outlet fees.

[ypsiguy]

Satellite has slowly been breaking down the barriers however.

- DISH's two primary new subscriber offers, DHA and Free Dish, are both no-contract.
- DISH is also adding tons of new local markets. I think they've got over half the DMAs up, and they say that they cover like 85% of viewers with locals.
- I think that DISH is the first company to have a million DVR users (effectively, over 10% of DISH subs have DVRs.)
- DISH's new receivers such as the 322 and 522 make things cheaper by eliminating many outlet fees.

Yeah!!! DVR on Dish!! Comcrap in my area doesn't even have that yet.

[scooper]

On my 27" TV's - Dish is perfectly acceptable. The programming package compared to cable is roughtly equal (analog cable, that is) - they have some channels Dish doesn't and vice versa, but the "fit" from Dish is better. My locals come in fine over antenna if the weather is bad enough that Dish is out (which doesn't happen very often) - DBS locals are a requirement for maximum use of my 510 however. If I had a Replay or S/A Tivo, that would serve the same purpose. I could get lifeline cable - but why ? - DBS locals are cheaper...

[Geronimo]

Ther are 210 DMAs. I think each provider has less than half. But probably covering a much greater % of the population.

[stonecold]

I think the 2nd poster was right, the largest jump in digital cable customers is analog customers being forced to use digital as comcast and others slowly take away there channels and put them on the digital side. In my town the Premiums are no longer on analog so if you want to watch HBO or Disney or Showtime you need to have a digital box.

[Mike Richardson]

Ther are 210 DMAs. I think each provider has less than half. But probably covering a much greater % of the population.

Echostar actually has something like 111 DMAs. DirecTV only has about 60 or 70 DMAs.

[BFG]

Well satellite will always be the better option for me as long as my cable co is adelphia :( :(

[ypsiguy]

On my 27" TV's - Dish is perfectly acceptable. The programming package compared to cable is roughtly equal (analog cable, that is) - they have some channels Dish doesn't and vice versa, but the "fit" from Dish is better. My locals come in fine over antenna if the weather is bad enough that Dish is out (which doesn't happen very often) - DBS locals are a requirement for maximum use of my 510 however. If I had a Replay or S/A Tivo, that would serve the same purpose. I could get lifeline cable - but why ? - DBS locals are cheaper...

It really depends on your area. My cable system offers quite a few OTA stations that Dish cannot provide for me. Like the CBC from Canada, out-of-DMA PBS channels, etc. Dish cannot provide that, period. I'm not a big friend of Comcrap, but if they provide a better service then I will sign up with them. Plus it is nice to see what's going on locally via the local access channels.

[scooper]

THat is certainly true - in MY situation - DBS (Dish) is a better deal than cable. YMMV. I also have no local access channels where I'm at - so no loss there. I fully agree that what works for me may not be the best for someone else.

[ypsiguy]

THat is certainly true - in MY situation - DBS (Dish) is a better deal than cable. YMMV. I also have no local access channels where I'm at - so no loss there. I fully agree that what works for me may not be the best for someone else.
Very true, DBS is finally starting to provide choice (nice to have). I just hope Congress goes further and gives us theme-based programming packages and re-regulation of cable.