• by Wayne Friedman , September 1, 2006

Expect the HDTV sales to soar over the next five years--penetrating more than 81 percent of U.S. TV households, or 180 million sets sold, according to a new study by Kagan Research.

Put in perspective, that figure is nine times the current 21 million sets that will be in the marketplace at the end of 2006, says Kagan. HDTV sets will have a 30 percent penetration level in U.S. TV households.

Right now, the HDTV programming and network market is still small. HDTV cable networks pulled in just $182 million in revenue--from subscriber fees and ad sales--at the end of 2005. The survey notes that although HDTV cable networks have a positive cash flow, they are expected to continue to lose money through 2006. Right now, ESPN HD gets the largest license fee at $0.84 per subscriber, per Kagan.

By 2011, however, Kagan says revenues from HD cable nets will quickly grow to just under $2.0 billion.

Other TV estimates by Kagan have satellite distributors DirecTV and EchoStar totaling 29.4 million subscribers, representing more than 30 percent of U.S. TV homes by the end of 2006. This is expected to rise 22.9 percent by 2010 to 33.7 million satellite TV homes. By comparison, the traditional cable TV market is expected to grow just 3 percent over the next five years to 67.4 million subscribers.