Bobthetech
10-02-2006, 06:10 AM
As telcos bring to market their video products, a new report said the effect is expected to be similar to that of the last ten years: the new platform will drive deeper multichannel penetration. The new study from Kagan Research goes on to say that the satellite industry should expect solid subscriber growth in the near term, waning a few years out as local-into-local and HD local penetration matures.
According to Kagan's The State of DBS report, the primary effect of telco TV will be to further diminish cable's share to 61 percent while increasing multichannel homes by nearly 20 million. And at the end of the 10-year horizon, the research firm projects satellite will notch more than six million net new subs to total more than 33.5 million by 2015.
"Despite the lack of a competitive solution to the return path issue, DBS will continue to be a major player in the multichannel market through its established base and strategy of targeting underserved markets such as rural areas and international communities," said Kagan SVP Derek Baine. "New technologies are making features such as VOD and interactive, once the sole domain of cable, available via satellite and narrowing the competitive divide. And with the launch of new satellites, DBS operators will have more capacity to offer more high definition channels in the near term than their counterparts."
Other findings and projections from 8th edition of Kagan's State of DBS report include:
- In 2005, subscriber additions to DBS declined 29 percent from the previous year as satcasters were hit with higher churn and increasing competition. The start of 2006 continued the trend with Q1 net adds down 50 percent year-over-year at DirecTV and 31 percent at EchoStar. Full year results are expected to be 1.8 million net adds, 22 percent below 2005 totals.
- The multichannel pie has expanded significantly over the past decade, growing 38 percent from 68 million in 1995 to 93.8 million at the end of 2005 (before netting out cable/DBS duplicates). But DBS's addition of nearly 25 million subs over the last ten years has shrunk cable's share of the market by more than 20 points.
- Short term, DBS has lots of capacity coming online and an advantage in beaming national channels. Telcos have only 20-25 Mbps for video, data and phone, limiting them to just one HD stream, and cable is already nearing capacity at recently upgraded plants.
According to Kagan's The State of DBS report, the primary effect of telco TV will be to further diminish cable's share to 61 percent while increasing multichannel homes by nearly 20 million. And at the end of the 10-year horizon, the research firm projects satellite will notch more than six million net new subs to total more than 33.5 million by 2015.
"Despite the lack of a competitive solution to the return path issue, DBS will continue to be a major player in the multichannel market through its established base and strategy of targeting underserved markets such as rural areas and international communities," said Kagan SVP Derek Baine. "New technologies are making features such as VOD and interactive, once the sole domain of cable, available via satellite and narrowing the competitive divide. And with the launch of new satellites, DBS operators will have more capacity to offer more high definition channels in the near term than their counterparts."
Other findings and projections from 8th edition of Kagan's State of DBS report include:
- In 2005, subscriber additions to DBS declined 29 percent from the previous year as satcasters were hit with higher churn and increasing competition. The start of 2006 continued the trend with Q1 net adds down 50 percent year-over-year at DirecTV and 31 percent at EchoStar. Full year results are expected to be 1.8 million net adds, 22 percent below 2005 totals.
- The multichannel pie has expanded significantly over the past decade, growing 38 percent from 68 million in 1995 to 93.8 million at the end of 2005 (before netting out cable/DBS duplicates). But DBS's addition of nearly 25 million subs over the last ten years has shrunk cable's share of the market by more than 20 points.
- Short term, DBS has lots of capacity coming online and an advantage in beaming national channels. Telcos have only 20-25 Mbps for video, data and phone, limiting them to just one HD stream, and cable is already nearing capacity at recently upgraded plants.