News

Moody's Revises Cable Sector Outlook

10/14/2010 10:53 AM Eastern

Credit rating agency Moody's Investor's Service revised its outlook on the cable sector to "stable with a positive outlook" from "positive" Wednesday, adding that the industry remains strong but growth is expected to slow in the rough economy.
Moody's said it continues to project revenue and cash flow growth of 3% to 4% through 2011 for the sector - likely higher through 2010 - but the risk of margin compression and further moderation of growth rates to low single-digit levels has increased as time has passed.
The culprits are continued economic sluggishness, competition from traditional and alternative outlets and the maturity of the video product. Moody's estimated that cable's share of the U.S. pay TV market will dip below 60% by 2011, down from more than 70% in 2005. The credit ratings giant also cautioned that broadband is approaching maturing penetration levels, and wireless substitution has stalled the growth of voice services. On the bright side, commercial services are a growing opportunity and the ratings service believes that a rebounding advertising market and aggressive cost cutting will provide a lift to revenue and cash flow.

Want to read more stories like this?
Get our Free Newsletter Here!
September
October

VR 20/20

The Times Center, New York, NY