Report: Digital Growth Slowed in 2002
By Karen Brown -- Multichannel News, 1/29/2003 7:52:00 AM
Digital-cable penetration will rise to 39 million homes by the end of 2007, but the pace of growth did slow in 2002, according to a new report from The Yankee Group.
The telecommunications-analysis firm found that digital-cable subscribers totaled 18.9 million by the end of 2002. But new subscriber numbers totaled 4 million, down from the 5 million- to 6 million-subscriber pace in the two previous years, according to the report.
While new services such as video-on-demand, personal video recorders and high-definition TV will drive digital-subscriber numbers higher, the industry faces three key hurdles, according to Aditya Kishore, Yankee's media and entertainment analyst.
"First, digital penetration is leveling off at 35 [percent] to 40 percent of subscribers," he said. "Second, high churn rates continue to plague the industry. Third, debt-burdened MSOs are under pressure to generate free cash flow, hampering their ability to rapidly conduct capital-intensive plant upgrades."
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