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Cable Companies Should Expect Moderate Growth Through 2012: SNL Kagan

7:30 am on May 31, 2008 | Category: Business, Telecom Services, Television

American cable operators should expect moderate growth in revenue over the next five years, according to a recent study by SNL Kagan, a sector-focused business consultancy.

SNL Kagan researchers expect multichannel cable TV subscriptions to grow at an annual rate of 2.1% over the next few years. The number of subscriptions will reach 108.5 million by 2012.

The study also predicts a drop in cable companies’ market share, however, from 64% to 59% by 2012. Telecom video services such as Verizon FiOS and AT&T U-verse will capture a market share of about 9% by that year, while satellite providers will gradually lose market share due to their inability to offer bundled voice/video/data services.

Researchers say that cable operators will need to offer their services in all-digital format in order to stem erosion in market share.

“Cable’s ability to prevent more rapid erosion to its subscriber base will depend on the migration to all-digital services,” said SNL Kagan senior analyst, Ian Olgeirson, in a statement. “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.”

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