• by Wayne Friedman , September 15, 2008

Although the cable industry is expected to lose basic video customers in the next five years as a result of new video competition, cable system operators can expect to see overall revenues climb 50% in 10 years, thanks to new digital services.

 

SNL Kagan, the Monterey, Calif.-based media researcher, says revenues for cable MSOs are forecast to reach $120 billion in 2018 from $81 billion this year. Revenues from new digital video, broadband and phone services will more than make up for losses that will come from its core basic video cable subscribers.

At the end of 2008, SNL Kagan estimates there will be 64.6 million basic video cable subscribers, 31.0 million satellite customers and 2.1 million telco video subscribers. SNL Kagan's five-year outlook calculations conclude that cable will effectively lose some 300,000 basic consumers, landing at 64.3 million subscribers.

Satellite services will climb 2.4 million to a total 33.4 million, and telco video providers will have the fastest growth rate, improving some 9.2 million to 11.3 million.

Near term, Robin Flynn, senior analyst at media research SNL Kagan, writes in a report that cable systems will see major gains from the switch to an all-digital TV world come February 2009. "They are also executing their own digital transition to reclaim video bandwidth and expand their capacity to offer higher-margin services, faster Internet speeds and more interactive services."

SNL Kagan also says that cable phone customers' growth continues to climb rapidly, and is estimated to reach 18.1 million by the end of 2008. This number has tripled since 2006. SNL Kagan also expected digital cable subscribers to grow 5 million by year's end to 42 million.