Friday, February 4, 2005

Competition Grows in U.S. Video Delivery Market

Competition is taking off in the U.S. market for the delivery of video services, concludes the 11th annual FCC report of the state of the cable industry. Almost all U.S. consumers have the choice between over-the-air broadcast television, a cable service, and at least two direct broadcast satellite (DBS) providers. In some areas, consumers also can choose to receive service via one or more emerging technologies, including digital broadcast spectrum, fiber, and video over the Internet.

Additional conclusions include:

  • overall cable subscribership remained relatively stable over the past year,

  • DBS subscriberships continued to increase at double-digit rates of growth, which is due in part to the continued increase in the number of markets where local broadcast television stations are distributed by DBS

  • As of June 2004, 92.3 million households subscribed to an MVPD -- with 71.6% subscribing to a franchised cable operator, 25.1% receiving their video programming from a DBS operator, and 3.3% of subscribers choosing service from other types of providers (e.g., broadband service provider (BSP), wireless cable operator, private cable operator).

  • As a result of system upgrades and increased competition from DBS services, cable subscribers are enjoying a broad range of advanced services, such as digital tiers and video on demand, as well as more channels of video programming

  • As of June 2004, DBS operators had over 23.16 million subscribers, an increase of close to 14% since the 2003 Report.

  • As of June 2004, there were about 18.5 million cable modem Internet access subscribers, up from 13.7 million a year earlier.

  • As of year-end 2003, cable operators were serving approximately 2.8 million subscribers with telephone service (circuit switched + VoIP)

  • DIRECTV has scaled back its plans to use SPACEWAY satellites to offer broadband services. EchoStar, which has offered satellite-based Internet services in the past, no longer offers its own service.

  • As of September 2004, all of the 40 stations that make up the top-four network affiliates in the top ten television markets were offering digital broadcasts and 1,468 television stations, representing 85% of all stations, are on the air with DTV operation.

  • As of June 2004, an estimated 64 million Americans subscribed to an Internet access service, and 30.1 million of those subscribed to a high-speed Internet access service, or about 47% of all subscribers.

  • As of July 2004, approximately 70% of TV households have a DVD player.

  • DVRs: TiVo, the largest DVR maker, has approximately two million subscribers, of which 1.1 million are DIRECTV subscribers. There are 1.4 million cable subscribers that have set-top boxes with DVR functionally, and EchoStar has over one million subscribers to its DVR system.

  • Cable operators' acquisitions and system trades slowed considerably in 2004. . In June 2003, the four largest operators served about 59% of all U.S. cable subscribers, whereas in June 2004, the four largest cable operators served about 58% of all U.S. cable subscribers.

  • The number of programming networks has increased over the last year. As of June 2003, there were approximately 339 nonbroadcast programming networks available for carriage by MVPDs. As of June 2004, there were 388 national nonbroadcast programming networks.

See also