Audio Video News

Despite competitive pressure from direct broadcast satellite (DBS) services, cable providers have managed to push subscription rates up faster than the pace of inflation, according to a report issued by the Federal Communications Commission at the beginning of January.

The consumer price index rose 1.1% for the 12-month period from July 2001 to the end of June 2002, but cable rates rose 6.3% during that time, the report states. Some of the increase could be attributed to more channels and services, including high-definition programming that wasn't available earlier.

The period covered by the report may be the first time cable companies have lost subscribers. "A number of major cable system operators have experienced significant subscriber losses during this period," the report said. Growth in the cable industry was less than 0.05% for the year, a period in which satellite services EchoStar and DirecTV reported record numbers of new subscribers.

DBS subscribers now represent more than 20% of the video market. The surge in subscriptions to satellite services is partly due to the availability of local TV stations over satellite, something that wasn't possible prior to a change in broadcasting regulations that took place in 1999. Cable stocks were depressed for most of 2002, with some cable providers struggling with massive debt.