Cable Operators

10-Year Forecast: Cable Subs Down, Revenue Up

11/29/2010 12:01 AM Eastern

New York — Cable subscribers will continue
to erode in the next 10 years, but the
sector’s revenue should climb at a healthy
pace during the next decade, according to
SNL Kagan research.

SNL Kagan senior analyst Robin Flynn,
in a presentation at the research firm’s Cable
MSO Summit here on Nov. 18, predicted
that cable video subscribers will fall from
60.7 million in 2010 to 56.8 million by 2020,
a 6.4% decline.

Competition from telco
video and satellite TV should
fuel the declines. At the same
time, cable high-speed Internet
customers should grow
from 42.7 million to 52 million
(up 22%) and phone customers
from 23.6 million
to 27.4 million (a 16.1% increase)
in the same period.

COMPETITORS GAIN SHARE

According to Flynn, cable’s overall share
of the multichannel video pie should continue
to dip — from 79% in 2000 to 53% by
2020, as satellite TV and telco see gains.
Flynn predicted that satellite’s share will
climb from 17% in 2000 to 31% by 2020 and
telco, at 0% in 2000, should capture 16% of
the multichannel market by 2020.

Flynn predicted that satellite-TV customers,
on an upward trajectory over the
past several years (she estimated they grew
12% between 2006 and 2009),
should peak at 34.6 million
in 2013 and 2014, falling to
33.6 million subscribers by
2020, flat with 2010.

Telco video customers
should nearly triple from
2010 (6.8 million) to 2020
(17.2 million). Penetration of
total footprint by telco video
should rise about more modestly in the decade,
from 17.2% in 2010 to 22.4% in 2020.
Flynn’s predictions seem to jibe with
most other analysts who follow the sector.

They see the housing slump, economic factors
and new technologies like over-the-top
video as weighing on basic cable subscriber
numbers.

At the same time, observers such as Sanford
Bernstein cable and satellite analyst
Craig Moffett see cable revenue growing as
advanced services gain steam.

DATA, HD POWER GROWTH

Flynn estimated that advanced services
like high-speed data and HD DVRs should
help boost overall cable revenue by more
than 30% in the 10-year period, from $87.6
billion in 2010 to $114.1 billion in 2020, according
to Flynn. That is despite a decline
in the percentage of multichannel households
from 86% in 2010 to 82% by 2020 and
a six-fold increase in so-called over-the-top
video customers from 3 million in 2010 to
18 million by 2020.

“There is still room for a viable cable industry,”
Flynn said.

October
November