• by Erik Sass , August 11, 2006

Industry reps for local broadcast and cable TV continued their long-running war of words on Thursday--this time with a bonus appearance by satellite TV, in the role of stalking horse. In its opening salvo, the Television Bureau of Advertising (TVB) claimed that increasing subscription rates for satellite TV will indirectly benefit local broadcasters. But cable reps dismissed this as folly.

According to the TVB, the latest Nielsen Media Research figures show more and more households receiving cable via an "alternative delivery system" (ADS), reaching a new high of 27.3 percent of all paying customers in July 2006. Satellite TV subscriptions in particular now account for 22.7 percent of paid video delivery--up from 19.7 percent a year ago. Meanwhile, "wired" cable subscriptions fell from 72.1 million in July 2005 to 69.2 million this year.

In essence, TVB claims that satellite TV is growing at the expense of wired cable--and that this can only benefit local broadcasters, since satellite can't deliver targeted local ads. "The higher the satellite penetration, the better it is for the local broadcast stations, because only the broadcast stations are delivering all the consumers in those markets," explained Gary Belis, vice president of communications for the TVB.

But Ira Sussman, vice president of research for the Cabletelevision Advertising Bureau (CAB), dismissed this argument: "Different markets go up and down, and the cable guys are selling triple play now, so ultimately I'm not worried." Cable execs rolled out "triple play"--phone, video, and Internet delivered via wire infrastructure--in response to satellite service.

Sussman went on: "For us the real issue is: how do marketers reach their key prospects?" Elaborating, he said that satellite and local cable reach "two different types of consumers." According to Sussman, "There's reasons people buy satellite, and reasons people buy local cable"--implying the existence of a divide that broadcast TV might not be able to bridge. "It's not about these small variations in overall numbers," Sussman went on. "It's about, how can [advertisers] target specific audiences and get the best media value?"

Nevertheless, Sussman's organization isn't shy about citing "overall numbers" to support its case. According to the CAB, recent studies from Nielsen Media Research and Kagan Research suggest satellite TV subscription rates are already leveling off, with satellite delivery slowing from 33 percent average year-over-year growth from 1996-2000 to 13 percent for 2001-2005.