Cable Operators

Two Sides To HDTV Acceleration

4/21/2006 8:00 PM Eastern

Cable operators are expected to significantly boost the rollout of high-definition set-top boxes in the near future, and Pali Research analyst Richard Greenfield wrote in a report last week that while the acceleration of new services is always encouraging, there is a down side as well. Greenfield wrote that virtually every cable chief technology officer at the National Show in Atlanta earlier this month expressed a desire to step up the HDTV rollout.

But Greenfield wrote that he fears that operators will de-emphasize the move to all-digital networks while they concentrate on rolling out more HDTV. That could pose problems in the future because of bandwidth constraints — moving to all digital would free up more spectrum to add more HDTV channels.

“At the NCTA convention, we sense cable operators were not interested in even considering all-digital [forced conversion] until digital penetration exceeds 70%,” Greenfield wrote, noting that only one operator, Cablevision Systems Corp., is anywhere near that level of digital penetration.

“We continue to believe consumers who buy new HDTVs will migrate toward whichever mutlichannel provider offers them the deepest HD programming,” Greenfield wrote. “While the bundle will be an advantage for cable versus satellite it will not prevent churn if programming is noticeably better elsewhere [over the past decade MSOs failed to accurately 'read’ early consumer demand for digital programming and DVRs relative to the satellite industry].”

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