Study Says Digital Won’t Be That Big

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Saying cable customers might not find video-on-demand and digital-video recorders all that indispensable, analyst firm JupiterResearch said last week it has scaled back its digital-cable penetration forecast and upped its forecast of satellite-TV growth.

Jupiter estimates 26 million digital-cable households in 2004, about 35% of cable households, rising to 43 million digital-cable homes (57% cable penetration) in 2009.

The 2004 estimate is down from an earlier 30 million. Jupiter had been forecasting 49.1 million by 2008.

Cable operators report that disconnect rates are higher for digital cable than for analog, Jupiter noted.

The researcher — watching high net growth rates for DirecTV Inc. and Dish Network — upped its direct-broadcast satellite forecast for 2004 by 7%, to 24.3 million homes.

Jupiter also expects 8% of digital-cable customers to be taking DVR service this year, about 2.2 million households.

It sees cable’s DVR home ranks rising rapidly (a 62% annual clip), to reach 24 million, or 57% digital-cable penetration, in 2009.

Still, Jupiter said surveys have shown less interest in DVRs among cable customers than among satellite customers, and opined, “for MSOs to exceed DVR penetration estimates, they will have to aggressively campaign to ensure consumers view DVRs as integral to their viewing experience.”

Jupiter figures 66% of satellite-TV customers will be equipped with DVRs in 2009, as satellite providers aggressively market the technology.

Cable households should grow to 75 million households in 2009 from 73 million this year.