Forrester: Cable Can Out-Do Satellite, Eventually

According to a new report, Forrester Research predicts that cable can fight back and win the battle with satellite TV, sooner-or-later.

The report suggests that cable operators should expand their video-on-demand (VOD) content, improve programming interfaces and offer entertainment gateways that deliver entertainment throughout the home.

"Nearly two-thirds of new satellite subscribers had cable last year, and 22 percent report that they had digital cable before shifting to the dish. Digital cable isn't sticking," said Josh Bernoff, principal analyst at Forrester. "But in the next five years, we believe that cable will take three tries at winning back satellite subscribers and ultimately will triumph."

The first step for cable TV is to add broad collections of VOD content to its digital cable product. To fight the threat of satellite's personal video recorders (PVRs), cable must respond with not just movies but also broad subscription VOD collections with programs from Discovery, Lifetime, ESPN and NBC.

The second step toward reversing satellite growth is to focus on improving the on-demand interface, which will become the key to creating customer satisfaction and driving traffic to VOD and information screens. Such interfaces will end satellite growth by 2004, says Forrester.

The final step in winning back satellite customers is to offer an entertainment gateway or a next-generation set-top box with a hard drive and a full-time broadband connection. This entertainment gateway will enable cable operators to offer new, revenue-generating services, including music downloads and games, content sharing and videoconferencing.

From SkyReport (Used with Permission)