02.02.2004 12:00 PM
Originally featured on BroadcastEngineering.com
Cable rates climb as broadcast TV viewership continues decline

Cable rates have risen more than twice as fast as the rate of inflation during the past decade despite the rise of competition from other multichannel outlets like direct-broadcast satellite services, the FCC reports. At the same time, traditional broadcast viewership continues its long decline.

Cable rates have increased more than 53 percent in the 10-year period from 1993-2003, while the consumer price index (CPI) rose 25.5 percent. In the one-year period following June 2002, cable prices rose 5.1 percent compared with a 2.1 percent increase in the overall CPI, said the new FCC report on competition in video markets.

While cable costs have gone up, the number of video channels and other services that cable operators offer has also increased. The cable industry claims that the rate increases cover programming and labor costs.

Though cable television remains the predominant technology for the delivery of video programming, cable’s share has fallen from almost 100 percent a decade ago to about 75 percent of pay TV subscribers. This is due to competition from direct broadcast satellite TV service, which first became commercially available in 1993. Today, almost 22 percent subscribe to a satellite service.

As for broadcast television, the FCC said audience levels continue to decline. During the 2002-2003 television season, broadcast television stations collectively (network affiliates, independent stations and public broadcast stations) accounted for an average 49 share of primetime viewing for all television households, compared to an average 74 share 10 years earlier.

The FCC said the most significant convergence of service offerings continues to be the pairing of high-speed Internet access services with video programming services. As of June 2003, there were more than 13.8 million cable modem high-speed Internet access subscribers. Like cable, the FCC said the direct broadcast satellite industry is continuing to develop ways to bring advanced services to their customers and that many MMDS and private cable operators also now offer Internet access services.

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