Study: Cable Pricing Up, Share Down - Multichannel

Study: Cable Pricing Up, Share Down

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J.D. Power and Associates announced Tuesday that subscribers' average monthly
expenditure has risen for cable but fallen for satellite-television service this
year, when cable's market share has continued to decline.

Power's "2003 Residential Cable/Satellite TV Customer Satisfaction Study"
pointed out that the price gap between cable and satellite has "narrowed
significantly" in the past five years, and this year, satellite's average
monthly price fell below cable's for the first time.

Specifically, Power reported, customers' monthly cable spending has averaged
$49.62 this year, up 41% from 1998, whereas satellite customers' monthly
expenditure has risen 8% since 1998 to $48.93 this year.

Power noted that much of cable's upsurge in monthly pricing is attributable
to upgraded and/or additional services, ranging from digital cable and
video-on-demand to HDTV.

Turning to penetration levels, Power said cable's dominance is being
challenged by satellite's steady subscription growth. A total of 60% of
households surveyed now subscribe to cable service, down from 68% five years
ago, Power reported, while satellite subscriptions have grown from 7% in 1998 to
17% this year.

"Digital cable has not turned out to be the solution the cable industry
needed to stem the tide of migration to satellite providers," Power senior
director of telecommunications research Steve Kirkeby said in a prepared
statement.

Digital-cable subscribers do report higher satisfaction levels than analog
customers, he added, but both of those subscriber segments lag behind satellite
customers' satisfaction level, "with cost of service being a key issue," Kirkeby
said.

The Westlake Village, Calif.-based marketing-information-services firm
suggested that cable providers may have "an opportunity to stem this migration
to satellite" by bundling telephony and Internet access with cable service.

A total of 34% of cable customers told Power they want a single bill
combining cable with other telecommunications products or
services.

DirecTV Inc. ranked highest in customer satisfaction among the 18 cable/satellite providers measured by Power, followed by EchoStar Communications Corp.'s Dish Network, Cox Communications Inc., WideOpenWest LLC, Cable One Inc., RCN Corp. and Time Warner Cable.

DirecTV was tops in performance/reliability, cost of service, billing and offerings/promotions, Power noted.

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