Cable subscriptions to drop

A new report indicates cable TV penetration will drop 4% over the next 10 years as Internet-based video services and telecom services gain more control of the industry.

By 2013, online video will be in 7.1 million homes across the United States, according to SNL Kagan researchers.  Six years later, the number will have doubled up to 14 million homes.

Cable will receive the short end of the stick, with a 63.2M subscriber base dropping down to 60.7M by 2019.
microtek-lcd-hdtvEven though U.S. households with TVs will grow only 1.3% over the next decade, content will become the main goal for TV companies.

Expect more competition among content providers, as companies look for the next big revenue maker.  For example, Comcast recently disclosed plans to purchase a 51% stake in NBC Universal.  The deal would also include Universal Studios Home Entertainment, and would be a large step in Comcast’s latest attempt to control a bigger presence in home entertainment.

Direct-broadcast satellite (DBS) service should increase up to 33.6 M in 2013 from the current 32.2 million subscribers this year.

“Telecoms are well-positioned to grab the majority of new customers,” SNL Kagan analyst Mari Rondeli said in a statement.  “However, Telco’s limited footprint — only 24% of total homes — means cable and DBS will easily maintain the greater portion of the pie.”

I look forward to seeing how cable and satellite operators try to avoid losing massive numbers of subscribers who switch to other content providers.