U.S. Cable Revenues to Nearly Double Over Next Five Years
U.S. cable operator gross revenues will rise from $35 billion in 2000 to more than $60 billion in 2006, says a new report from Allied Business Intelligence (ABI). A significant part of the expanded revenue base will be from new services.
According to "U.S. Cable Television Infrastructure: CATV Equipment Markets and System Trends," the share of revenues from basic and enhanced basic service will drop from 65 percent in 2000 to 56 percent in 2006. This may not seem significant except that basic and enhanced basic are the core of cable television. Every cable subscriber gets these services.
Newer services will grow rapidly, but they will start at such a low base that they will not dwarf basic by the end of 2006, according to the study.
Basic and enhanced basic revenues are only growing at a four percent rate, even with price increases. Much of this revenue does not go into the cable operators' pockets, but of the networks carried.
Cable modems provided operators with just over $1 billion in revenue in 2000. But the incremental cash flow can be as much as 70 percent, and this number will be more than $5 billion in 2006.
Similarly, digital channel tiers only bring in, on average, $10 to $13 per digital subscriber in additional revenue–up to 60 percent of this is incremental cash flow. Digital revenues will rise from under $1 billion to more than $4 billion in 2006.