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Forrester: Cable must charge more for HDTV

Mon, 03/10/2003 - 7:00pm
Jeff Baumgartner

Although several recent forecasts have ballyhooed the future success of digital television, Forrester Research isn't quite as enthralled with the technology and the service it offers...at least in its present form.

In fact, Forrester this week called DTV "a profitless exercise for the television industry." Further, "most broadcasters, cable companies and networks deliver digital TV to please regulators, not to make money," the research firm contends. "High-definition TV content will continue to lag until a viable revenue stream emerges."

To back that position, Forrester notes that more than 500 broadcasters have yet to complete their mandated digital conversion. Moreover, cable is confined because of bandwidth constraints, Forrester adds, though the firm does not mention that several "grooming" products from companies such as BigBand Networks and Terayon Communication Systems have emerged to help cable specifically in this regard.

Still, Forrester does offer its own recipes for success. For cable, the research unit believes cable operators should charge more for HDTV, citing research that suggests that "elite" customers who have enough cash to buy big-screen HDTVs and those who are "likely to buy" will pay more than $10 per month for the service.

Additionally, Forrester believes MSOs should pay networks for HD content, because top-rated HDTV shows tend to be on local channels. HD programming from the likes of Discovery, ESPN and HBO isn't enough, Forrester adds.

Finally, Forrester suggests that regulators should accept this model and, therefore, allow "affluent" HDTV owners to subsidize the digital transition with payments to cable operators. The combination would grow HDTV content and hasten the government's sale of legacy analog TV spectrum.

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