Cable Cranks Up The Propaganda

It’s that time again, the lead up to CES (which kicks off this weekend – I’ll be there) always sees a flood of press releases from all sides. The cable industry just dropped five press releases, which are mainly designed to talk up their great works, and show just how evil efforts like a la carte programming are. Surprise. But they do have some interesting raw data, so I thought I’d share that.

Cable Statistics
Basic Cable Subscribers as of June 2007 65,300,000
Cable Penetration of TV Households as of June 2007 58.3%

Cable Industry’s Investment
Cable Industry Construction/Upgrade Expenditures for 2006 $12.4 billion
Cable Industry Construction/Upgrade Expenditures for 10 years $110 billion

Cable Internet Service
Residential/Commercial Cable Internet Subscribers as of September 2007 34,657,000
Residential Cable Internet Subscribers in September 2001 5,500,000

Digital Cable
Digital Cable Customers as of September 2007 36,150,000
Digital Cable Customers in September 2001 12,200,000
Homes Passed by HDTV Service as of March 2007 110,000,000+

Digital Phone
Residential Cable Phone Customers as of September 2007 13,700,000
Residential Cable Phone Customers in September 2001 1,300,000

Schools Served by Cable in the Classroom as of September 2007 81,775
Students Served by Cable in the Classroom as of 2007 44,184,380

I also love the ‘passed by’ statistics. That’s basically the number homes who could have HDTV via cable.

Let’s see, what else did they have to say… The annual increase in the average basic cable monthly rate has been less than 4% in each of the last 3 years (2005-2007). Basic cable network viewing time increased 68% from 1995 through 2005. For the 6th consecutive year, ad-supported cable is projected to best the broadcast networks in prime time, with a 55.4% household share to date, and 40.4% for the six broadcast networks combined. Cable’s bundled video, Internet, and voice service costs 23% less, when adjusted for inflation, than 10 years ago. Internet access speeds are 17,000% to 50,000% faster than 10 years ago (1996 average 28.8Kbps, today’s 5Mbps to 30Mbps available services).

Of course, they couldn’t resist some shots at the competition. They say DBS’s average price rose 8.1% from 2005 to 2006. In November, Verizon announced an increase on their core ‘FiOS Premier’ offering of 11.6% in 2008, after announcing in November 2006 a 7.6% increase.

They also took aim at a la carte programming, using all the arguments we’ve heard before. If the tiers were broken up and the cable operators couldn’t buy channels in packages, prices would go up. Consumers would end up paying more for for less – the costs per channel would rise, and cable operators would drop the channels with less demand because they wouldn’t be economical. Today lower popularity channels can be ‘subsidized’ by the more popular channels in their bundle. You know, History International might get a boost from The History Channel, that kind of thing.

Having read, and heard, a lot of arguments about a la carte from both sides over the past few years, and despite my instinctive reaction that choice is good – I have to agree with cable on this one. Based on everything I’ve seen, I just don’t think a la carte is a good option. If all you watch are a few major channels – *maybe*. But if you watch a lot of cable channels, especially specialty channels, it would not be good for you. The way content is sold to the cable MSOs today, as bundles, creates economies of scale. And the content providers use that to push new channels – “If you want to carry ABC, then you MUST carry ABC Family. Or no deal” – and with the bundles gone we’d be less likely to see new channels or creative content. And channels would need some critical mass to be viable. Almost everyone would end up paying more, and getting fewer channels.

About MegaZone

MegaZone is the Editor of Gizmo Lovers and the chief contributor. He's been online since 1989 and active in several generations of 'social media' - mailing lists, USENet groups, web forums, and since 2003, blogging.    MegaZone has a presence on several social platforms: Google+ / Facebook / Twitter / LinkedIn / LiveJournal / Web.    You can also follow Gizmo Lovers on other sites: Blog / Google+ / Facebook / Twitter.
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  • Chris H

    Even beyond everything you say — and, like you, I normally side with choice but don’t in this case — there’s the additional issue of channels that nobody really wants like shopping channels, which actually pay the MSOs to be carried. The only way that would work would be if the shopping channels, etc. were still automatically included, regardless of a la carte selections.