Big bets for the US cable industry: Key opportunities for future revenue growth

August 2005
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Big Bets for the U.S. Cable Industry

At a glance

Cable operators and networks face tremendous challenges and great opportunities over the next decade. A saturated core subscriber base, increasing audience fragmentation, intense compeition from telecommunications carriers, disruptive new technologies, and changing consumer behavior are some of the issues affecting the industry.

In this 2005 report, PwC analyzes the growth strategies that the US cable TV industry will pursue over the short (2 to 5 years) and longer term (5 to 10 years). Each of the two main industry sectors—cable operators that sell and distribute cable signals to consumers and cable networks that develop, produce, and market programming networks to the operators—will face its own unique sets of challenges and opportunities during the next decade. After two decades of robust growth, the industry is facing significant challenges to future growth. With more than 300 existing programming channels resulting in increased audience fragmentation, the prospects for creating additional revenues by launching new channels are very limited. At the same time, the pool of subscribers to multi-channel video services is unlikely to grow beyond where it stands today: 86% of US households. The majority of those subscribers are served by cable. The remaining subscribers are served either by satellite television, the cable industry’s established competitor, or by a telecommunications carrier, an emerging competitor. This increased competition, in conjunction with the growing use of new technologies, is also bringing about changes in consumer behavior and expectations.