Cablecos bite back with innovations
Joseph O'Halloran ©RapidTVNews | 26-03-2012
Even though many predict their days are numbered, cable operators are beginning a fight back that will see a marked increase in revenue over the next five years, new research has revealed.
According to IBISWorld's Cable Networks report in the US, the cable industry is essentially seeing off competition from over the top (OTT) provider with cable consumers increasingly willing to pay for entertainment that suits their interests with growth a result of increasingly specialised services that cable networks provide. This is enabling cablecos to charge premium prices to key consumers.
"Revenue is expected to increase at an annualised rate of 5.2% over the five years to 2012, despite a drop in advertising spending that stemmed from increased competition from other media (including the internet) and lower corporate profit," explained IBISWorld industry analyst Agata Kaczanowska. By the end of 2012, the Cable Networks industry is estimated to garner revenue of $17.9 billion, representing 5.5% growth for the year.
New independent networks are also increasing in popularity, especially as production and distribution costs wane, Kaczanowska said. This is the chief reason for 0.8% annualized enterprise growth to 406 firms in 2012, IBIS World said.
Looking forward the analyst expects the cable industry to fare well over the next five years with further consolidation within the industry serving to strengthen the position of industry operators, leading to a continued growth in profit. IBISWorld projects that the industry's top players—The Walt Disney Company, Viacom, Time Warner, Comcast and News Corp—will make up about half of the industry’s revenue.
However it what may be a challenge for operators, IBISWorld notes that US regulator the Federal Communications Commission (FCC) limits the extent of vertical integration between the cable networks and distributors.