Sources: No Conclusions about Competitiveness in FCC Video Competition Report

Data Shows Cable, Broadcast Viewing Still Strong, but Some Inroads by Satellite, Over-The-Top
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Look for the FCC's latest video competition report -- its 15th -- to be short on conclusions and long on data points illustrating that alternative providers and distribution models are making inroads on traditional delivery, but that those traditional video providers remain the lead dogs.

According to an FCC source with knowledge of the report, which is being released Friday by the Media Bureau at the commission's July open meeting, the data suggests that while traditional markets are still strong, things are beginning to change.

The report does not draw any conclusions about whether or not the market is competitive, according to multiple sources. Instead, it basically lays out data and input from others on that information, then says that at this moment, everybody is largely "sitting pretty" where they are, but they are feeling the hot breath of new competitors like cord-cutters and others moving away from traditional models.

The report includes Nielsen data showing that the average American in a week will consume 34 hours and seven minutes of traditional television, two hours and 40 minutes of time-shifted viewing, 40 minutes of Internet video and 10 minutes of smartphone viewing.

The report will also include figures that show that revenues are going up for broadcasters, with a good sized bump projected for 2012, and are still going up for cable operators and programmers, but that, at the margins as programming costs go up as well, cable MVPDs are losing subs.

The report notes that cable subscribership was at 57.4% in 2011 down to 55.7% in June 2012. By contrast, DBS is going the other way, at least slightly, from 33.9 million in 2011 to 34 million in 2012. 

At the same time, there has been some slight concentration in the cable marketplace. Another report data point is that at the end of 2010 the top 10 cable operators represented 89.1% of subs, now its 90.4%.

The top five used to represent 80.1%; now it's 80.7%.

On the broadcast side, the report also talks about consolidation, but only mentions in passing the latest "super group" deals since they have not closed yet. The report talks about how many TV stations were bought and sold as of, at the latest, mid-2012, but does not analyze the deals.

Online video distributors are probably the fastest-growing segment in terms of new subscribers -- from 26.6 million households to 41.6 million as of June 2012.

The report doesn't draw conclusions about how competitive the market is, but it does base its competitive analysis on the assumption that, as of 2011, 100% of households have at least two MVPDs thanks to Dish and DirecTV, and that 98.6% have access to at least three competitors when cable/telcos are added in.

The FCC has been putting its money where that competitive test is, routinely granting cable requests for effective competition determinations -- deregulation of basic rates -- based on the presence and subscriber uptake benchmarks of Dish and DirecTV.

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