81 percent of U.S. TV households to go HD by 2010, study says

Consumers purchased more than 21 million HDTV sets by year-end 2005, and by year-end 2006, the penetration of HD sets into TV households will reach nearly 30 percent, according to a new study from Kagan Research.

The study, “Economics of High-Definition Cable Networks,” forecasts that by 2010 nearly 180 million HDTV sets will have been sold to U.S consumers, penetrating more than 81 percent of TV households.

In 2005, HD cable networks generated an estimated $182 million, said Derek Baine, senior vice president of Kagan Research. However, by 2010 Baine expects the figure to reach $1.9 billion. Currently, some HD networks are “producing positive cash flow,” but most are expected to lose money through 2006, while subscribers, affiliates and ad revenue “catch up with programming expenses,” he said.

MSOs will be pressured to add more HD networks. The ranks of DIRECTV and EchoStar subscribers will swell to 29.4 million by yearend, or 30.3 percent of the multichannel universe, according to Kagan. The research group forecasts annual direct-to-home satellite subscriber growth of 2.6 percent, with the total subscriber base hitting 34.2 million in 2011.

Among the other findings in the new report are:

  • The number of HD subscribers across DBS and cable platforms at year-end 2005 totaled 5.5 million. Cable operators secured nearly 70 percent of that total.
  • At $0.84 per subscriber, ESPN HD sports commands the largest license fee among all HD networks.

For more information, visit: www.kagan.com.