NEW YORK -- In its ninth annual state of the industry review, the Federal Communications Commission reported that, once again, cable rates grew well ahead of inflation.
According to Bureau of Labor Statistics, average cable prices rose 6.3% for the year to June 2002, compared with a 1.1% increase in consumer inflation. The explanation is familiar: Programmers had to pay more for programming while they were busy offering their customers more channels.
But subscribers weren't fooled, as cablers saw their customer base decline, albeit slightly, for the first time. Though the FCC's numbers date only to June 2002, at which time total cable and satellite subscribers grew 1.8% to 89.9 million, the federal organ noted the slowdown in cable growth and the expectation among major MSOs that calendar year 2002 may be the first year the industry experienced a net loss of subs.
Much of the overall gain in total subscribers came to DBS providers, who now claim more than 20% of all subscription TV customers with 18 million total households, which is significantly higher than the cable subscriber growth rate.
Competition alive
In its study released Dec. 31, the FCC nevertheless reports that competition in the video markets is alive and well. Among other key findings:
- Cable audience shares rose from an average 54.2 share between July 2000 and June 2001 to an average 58.3 share between July 2001 and June 2002.
- The number of national satellite-delivered video programming services increased from 287 to 308 between June 2001 and June 2002.
- Overall audience levels continue to decline. For total day (24-hour) viewing, broadcast television stations accounted for a combined 52.4 share of viewing in all TV households, down from a 56.2 share the previous season.
- As of June 2002, an estimated 54 million Americans subscribed to an Internet access service, compared with 50 million as of June 2001.
- The 10 largest cable MSOs served about 85% of all U.S. cable subscribers, though the largest MSOs continue to become more equal in size.
Contact the Variety newsroom at
news@variety.com