09.07.2006 12:00 AM
Kagan: HD Cable Revenues to Reach $1.8 Billion by 2010
More than 21 million HD sets had been sold to U.S. consumers by the end of 2005 and by year-end 2006; penetration of HD sets into TV households is expected to reach just under 30 percent, according to a new study from Kagan Research.

The research firm forecasts that by 2010, nearly 180 million HD units will have been sold to U.S consumers, achieving a penetration rate of slightly over 80 percent. Kagan said the current number of HD households remains small (with many HD set owners not actually using an HD service of any kind), and, therefore, the market for HD cable networks was only a predicted $182 million in 2005.

But Kagan said the numbers will grow dramatically in the next four years, to more than $1.9 billion by 2010. "HD networks are expected to lose money through 2006 as subscriber numbers and affiliate and ad revenue catch up with programming expenses," Kagan said.

Cable will continue to be put under pressure to add more HD networks, Kagan said, while DBS firms have added subscribers at an "impressive pace." Kagan estimates that by the end of 2006, satellite subs will total 29.4 million -- slightly breaking the 30 percent mark of the multichannel universe.

At $0.84 per sub, ESPN HD has the largest license fee among all HD networks, according to Kagan.

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