| |
What Slump?
|
The average household spent $34.07/month on cable (+8.4%) last year, marking the 8th consecutive yearly increase for the industry. "We expect average monthly spending per household for basic wired cable to climb at a steady pace...growing at a compound annual rate of 3.0% from 2002-2007 to $39.51 in 2007," says "Communications Industry Forecast & Report," published by Veronis Suhler Stevenson (a major investor in CableFAX databrief parent Access Intelligence).
|
|
| Growth of Household Spending on Basic Cable & Satellite TV |
| Total Spending |
|
Year
|
|
Wired Cable
|
|
|
Satellite & other
Multichannel Services
|
|
|
|
Total
|
|
1998
|
|
7.5%
|
|
|
28.9%
|
|
|
|
10.2%
|
|
1999
|
|
5.9%
|
|
|
27.1%
|
|
|
|
9.0%
|
|
2000
|
|
7.3%
|
|
|
22.0%
|
|
|
|
9.8%
|
|
2001
|
|
6.5%
|
|
|
20.7%
|
|
|
|
9.2%
|
|
2002
|
|
9.3%
|
|
|
17.4%
|
|
|
|
11.0%
|
|
2003*
|
|
5.0%
|
|
|
15.8%
|
|
|
|
7.4%
|
|
2004*
|
|
3.9%
|
|
|
18.9%
|
|
|
|
7.5%
|
|
2005*
|
|
2.3%
|
|
|
9.9%
|
|
|
|
4.3%
|
|
2006*
|
|
4.8%
|
|
|
8.0%
|
|
|
|
5.7%
|
|
2007*
|
|
5.0%
|
|
|
7.7%
|
|
|
|
5.8%
|
| Compound Annual Growth |
|
1997-2002
|
|
7.3%
|
|
|
23.2%
|
|
|
|
9.8%
|
|
2002-2007*
|
|
4.2%
|
|
|
12.0%
|
|
|
|
6.1%
|
|
Sources: Veronis Suhler Stevenson; PQ Media LLC; Kagan World Media
* Projected
|
|
|
|
Total household spending on basic services in cable and satellite jumped 11% in 2002 to $36.6bln, with cable accounting for $28.5bln of that amount (+9.3%). Additional services and rate increases drove the spending jumps.
|
|
| Growth of US Spending on Cable & Satellite Television |
| |
|
Basic
|
|
|
|
Premium
|
|
|
|
PPV
|
|
|
|
Advertising
|
|
|
|
License Fees
|
|
|
|
Total
|
| 2002 Spend (millions) |
|
$36,560
|
|
|
|
$8,588
|
|
|
|
$2,507
|
|
|
|
$14,673
|
|
|
|
$14,607
|
|
|
|
$76,935
|
| 1997-2002 Compound Annual Growth |
|
9.8%
|
|
|
|
6.4%
|
|
|
|
10.7%
|
|
|
|
12.8%
|
|
|
|
14.7%
|
|
|
|
10.8%
|
| 2002-2007 Compound Annual Growth Projected |
|
6.1%
|
|
|
|
6.0%
|
|
|
|
5.3%
|
|
|
|
9.7%
|
|
|
|
9.7%
|
|
|
|
7.5%
|
| 2007 Spend Projected (millions) |
|
$49,259
|
|
|
|
$11,470
|
|
|
|
$3,250
|
|
|
|
$23,297
|
|
|
|
$23,209
|
|
|
|
$110,485
|
| Sources: Veronis Suhler Stevenson; PQ Media LLC; Universal McCann, Kagan World Media |
|
|
|
Premium services were not as pleasant for cable. Satellite experienced more significant growth in that area than cable, expanding its premium sub base by 9.2% (to 27.2 million) in 2002. DBS also posted better spending per home on premium services. The report says DBS users have spent more per household for premium services than cable users since 1997 and "we expect this trend to continue" through 2007.
|
|
| Household Spending on Premium Cable & Satellite TV |
| Total Spending (millions) |
|
Year
|
|
Wired Cable
|
|
|
Satellite & other
Multichannel Services
|
|
|
|
Total
|
|
1997
|
|
$4,718
|
|
|
$1,576
|
|
|
|
$6,294
|
|
1998
|
|
$4,813
|
|
|
$1,994
|
|
|
|
$6,807
|
|
1999
|
|
$4,822
|
|
|
$2,390
|
|
|
|
$7,212
|
|
2000
|
|
$5,001
|
|
|
$2,313
|
|
|
|
$7,314
|
|
2001
|
|
$5,059
|
|
|
$2,912
|
|
|
|
$7,971
|
|
2002
|
|
$5,165
|
|
|
$3,423
|
|
|
|
$8,588
|
|
2003*
|
|
$5,287
|
|
|
$3,856
|
|
|
|
$9,143
|
|
2004*
|
|
$5,413
|
|
|
$4,166
|
|
|
|
$9,579
|
|
2005*
|
|
$5,580
|
|
|
$4,703
|
|
|
|
$10,283
|
|
2006*
|
|
$5,756
|
|
|
$5,284
|
|
|
|
$11,040
|
|
2007*
|
|
$5,986
|
|
|
$5,484
|
|
|
|
$11,470
|
Sources: Veronis Suhler Stevenson; PQ Media LLC; Kagan World Media
* Projected |
|
|
|
Still, the cable and satellite sector was healthy last year, with big increases in end-user spending and license fees helping spending grow 10.2% to $76.9 billion. "The 10.8% growth in consumer spending in 2002 [was] spurred by original programming and the availability of bundled Internet services, [and] helped the sector overcome slow growth in advertising," the report says.
|
|
| Growth of Publicly Reporting Cable & Satellite TV Company Revenue vs Total US Spending on Cable and Satellite TV |
| Total Spending (millions) |
|
Year
|
|
Publicly Reporting Companies*
|
|
|
Cable & Satellite TV Industry**
|
|
1999
|
|
16.9%
|
|
|
12.7%
|
|
2000
|
|
34.1%
|
|
|
10.3%
|
|
2001
|
|
16.0%
|
|
|
9.4%
|
|
2002
|
|
10.1%
|
|
|
10.2%
|
|
Compound Annual Growth
|
|
18.9%
|
|
|
10.6%
|
Source: Veronis Suhler Stevenson Communications Industry Forecast
*Revenue growth of the publicly reporting companies in this segment
**Growth of total US cable & satellite TV spending |
|
|
|
The 27 publicly held cable and satellite companies covered by the report posted a 10.1% revenue jump to $69.1 billion, growing at a compound annual rate of 18.9% from 1998 to 2002. The same companies, however, reported a wider loss last year ($12.3 billion), compared to 2001 ($7.4 billion loss). The culprits were acquisition costs, expansion and upgrades.
|
|
| Adjusted Revenue, Operating Income, Operating Cash Flow and Assets of Publicly Reporting Cable & Satellite TV Companies ($ Millions) |
|
Year
|
|
Revenue
|
|
|
Operating Income
|
|
Operating Cash Flow
|
|
Assets
|
|
1998
|
|
$34,514.5
|
|
|
$3,426.8
|
|
$9,787.9
|
|
$117,962.2
|
|
1999
|
|
$40,343.5
|
|
|
$980.8
|
|
$9,486.1
|
|
$233,344.8
|
|
2000
|
|
$54,090.6
|
|
|
$4,637.7
|
|
$23,231.4
|
|
$411,698.5
|
|
2001
|
|
$62,733.6
|
|
|
-$7,417.9
|
|
$15,040.7
|
|
$414,086.9
|
|
2002
|
|
$69,067.6
|
|
|
-$12,295.6
|
|
-$1,758.7
|
|
$315,870.7
|
| Sources: Veronis Suhler Stevenson; PQ Media LLC |
|
|
| Growth of Revenue, Operating Income, Operating Cash Flow and Assets of Publicly Reporting Cable & Satellite TV Companies |
|
Year
|
|
Revenue
|
|
|
Operating Income
|
|
Operating Cash Flow
|
|
Assets
|
|
1999
|
|
16.9%
|
|
|
-71.4%
|
|
-3.1%
|
|
97.8%
|
|
2000
|
|
34.1%
|
|
|
372.8%
|
|
144.9%
|
|
76.4%
|
|
2001
|
|
16.0%
|
|
|
BC
|
|
-35.3%
|
|
0.6%
|
|
2002
|
|
10.1%
|
|
|
NC
|
|
NC
|
|
-23.7%
|
|
Compound Annual Growth
|
|
18.9%
|
|
|
NC
|
|
NC
|
|
27.9%
|
| Sources: Veronis Suhler Stevenson; PQ Media LLC |
|
| |
 |
|
|
|
|
