Study Reveals Cables Impact on Consumer

Publish date:
Updated on

The cable industry has pumped $30 billion into capital
investment so far this decade, installing 100,000 miles of fiber and 1.2 million miles of
plant -- enough to circle the globe 50 times. Last year, the industry lined municipal
coffers with $1.5 billion in franchise fees.

So says a fresh study on cable television's impact on

The study -- by Bortz Media and Sports Group Inc., a
cable-consulting and research firm in Denver -- took nearly one year to compile. It tracks
cable's growth and its impact on society in several segments, including technology,
economics, operations, public service, programming and subscriber growth. Cable pioneer
Bill Daniels commissioned it.

Cable, the study added, employs 120,000 workers in 50
states at 11,000 individual cable systems. The industry annually pays $7 billion in
licensing fees to programmers, or $110 per cable customer. Subscribers now pay an average
of 25 cents per hour for programming that they actually view, the same as in 1988.

"That was the most significant finding, in our
opinion," said Jim Trautman, executive vice president of Bortz Media. "The
affordability of cable as related to cost per hour viewed was really significant. People
are actually paying less for what they watch versus 10 years ago. That was really

Subscribers are also enjoying an explosion in basic-cable
channels, which have doubled from 27 to 49 since 1986. And people, including more
children, are watching basic programming an average of 24 hours per week.

Cable, the report continued, provides 80 percent of
children's (ages two through 11) programming each week, and 540 hours of educational
programming through free cable hookups to 78,000 schools, or 75 percent of all elementary
and secondary schools in the United States. It has also invested more than $420 million in
school resources.

Here are other key findings from the "Cable Television
Today" Study:

• Annual spending by basic networks grew from $433
million in 1986 to $4.2 billion in 1997.

• The price of basic cable per channel has risen by 2
percent annually since 1986, but it is 15 percent lower than in 1986 when adjusted for

• The average cable home devotes more than 24 hours
per week to watching basic cable.

• Nationwide, there are 23 all-news channels with
local or regional focus, serving more than 18 million cable subscribers nationwide. More
are being added.

• Cable deployed one-third of all U.S. fiber optic
cable route miles in one year, 1996.

• By year-end 1998, 38 million homes passed by cable
will be two-way-capable.

• A total of 100,000 miles of fiber have been
installed to date.

• High-speed Internet access is being offered to
nearly 300,000 customers by 18 cable companies in 29 states.

• Cable has helped to increase the number of UHF
stations from 218 to 545.

• Cable's earnings before interest and taxes (EBIT) as
a percent of revenues is 11.8 percent. The four broadcast networks average 36 percent.

• Cable-industry-funded C-SPAN now reaches 72 million

• There are nearly 11,000 individual cable systems

• More than 1,000 schools will have high-speed
Internet access by year-end 1998.