Audio Video News

The direct broadcast satellite industry is making great progress over cable providers in the digital TV arena, according to a recently published study by research firm Strategy Analytics. Worldwide, more than twice as many new subscribers to digital television signed up with DBS services than with cable last year, the study finds.

In 2000, 65% of all new digital television customers opted for a satellite-delivered service, compared to only 31% who signed up for cable. Cable operators in the US, Europe, and elsewhere have been slow to respond to the growing threat from satellite-based multichannel and interactive services, according to Strategy Analytics' "Interactive Digital Television: Worldwide Market Forecasts." Of the 20.5 million homes that switched to digital TV in 2000, DBS services captured 65%, an increase from 64% the year before, during which time cable's share fell from 32% to 31%. Terrestrial digital TV operators recruited only 4% of the market each year.

Digital signals reached four-and-a-half million cable subscribers in North America in 2000, a penetration of a scant 12% of cable homes. In most parts of Europe, only 7% of cable homes have so far switched to a digital service. Cable will regain some momentum in 2001, Strategy Analytics predicts, with growth in some satellite services slowing down as European cable operators put more emphasis on digital. The researchers predict that cable will account for 40% of new digital subscriptions worldwide, with 55% for satellite. "The continued restructuring and consolidation of the cable industry will eventually help to speed the digital transition," said an SA vice president. "Right now, though, satellite appears to be continuing its momentum."

The cable industry may receive a boost from a March 1 ruling by a US Court of Appeals that struck down rules restricting cable ownership. The three-judge panel of the court ruled that the Federal Communications Commission had not justified its rule prohibiting any one cable system owner from serving more than 30% of the nation's cable and satellite television subscribers. The court ordered the FCC to review the rule. The FCC could only justify a 60% cap, the judges found. As a result, AT&T may not be required to divest some of its cable empire. The divestiture was ordered when AT&T merged with the MediaOne Group, pushing its market share over the 30% limit.