Guest Commentary: Cable’s Investment Pays Off for Consumers

Jun 9, 2003  •  Post A Comment

Cable 2003, “The National Show,” this week in Chicago will shine a spotlight on the cable industry’s continuing rollout of digital broadband services. Panels will focus on new interactive programming services such as video-on-demand and subscription-video-on-demand, and a special HDTV Pavilion will be the centerpiece of the exhibit floor. Emerging online broadband services will also be the focus of discussion.
The emergence of new digital broadband services should come as no surprise. Since its inception in the 1950s, cable has been at the forefront of providing consumers with new services. Fifty years ago, it was retransmission of television signals to areas not reached by over-the-air broadcast signals. In the 1970s and ’80s, with the creation of satellite-delivered programming networks, cable offered consumers an array of programming beyond what broadcasters could offer. Today, as it facilitates the transition from analog-based services to digital services, the cable industry continues to offer consumers not only new ways of watching television, but also high-speed Internet access and digital cable phone service.
Today’s innovations are driven by consumer demand. We know that customers have choices. They want more, better, faster. Competition for the entertainment dollar is tough. But despite increased competition, cable is well-positioned and well-prepared.
The industry’s ability to offer these new digital services is due to a massive upgrade of its infrastructure, fueled by $75 billion of private capital since 1996, more than $1,000 per cable subscriber. That investment has led to comprehensive deployment of advanced digital services to more than 85 million U.S. households. Today, more than 20 million consumers enjoy digital cable services. The number of cable modem customers now tops 12 million. Additionally, 2.5 million residential consumers have signed up for cable phone service. These advanced services give consumers ever-increasing choice and value.
Over the past year, the cable industry has made great progress in launching digital TV services. Multiple system operators are offering HDTV in dozens of markets across the country. As of June 1, HDTV programming is being provided by at least one cable operator in 78 of the top 100 markets and 34 markets beyond the top 100, passing a total of 55 million homes. In addition, cable systems are carrying 190 individual stations broadcasting in digital. And cable programmers-including HBO, Showtime, ESPN, Discovery, HDNet, MSG Network and Comcast SportsNet-have become leading providers of HD programming.
Consumers are also benefiting from an investment of $50 billion in programming by cable-programming networks since 1996, including $10.3 billion this year alone. This substantial commitment, an increase of nearly $1 billion from last year, gives consumers even greater choice of high-quality educational, public affairs, sports and entertainment programming. The number of national cable networks now exceeds 300, three times the number that existed when the Cable Act of 1992 was enacted. The result of this growth? More viewers are turning to cable.
As readers of TelevisionWeek are aware, the 2001-02 television season was a bellwether period for ad-supported cable networks. In total season prime-time share, more consumers watched basic cable programming than all seven broadcast networks (ABC, CBS, Fox, NBC, UPN, WB and Pax) combined. In all television households, basic cable networks received 53 percent of all viewing during that season, more than doubling the total day basic cable network viewing share of 24 percent from a decade earlier.
The quality of cable programming is also acknowledged by cable’s peers. Cable networks received a record number of Emmy nominations in 2002, with 17 networks garnering a total of 191 nominations. Substantial numbers of Golden Globe, Producers Guild and George Foster Peabody Awards in the first half of 2003 have further affirmed the cable industry’s aggressive efforts to provide viewers with new, innovative programming.
Cable faces serious competition in every segment of its business. Direct broadcast satellite providers have signed up nearly 20 million customers in the past decade. The regional Bells are ratcheting up their marketing of digital subscriber line technology for broadband Internet access. And the vast portion of voice business continues to be dominated by incumbent phone companies.
But with excellent programming, broadband technology, a host of new digital services and the entrepreneurial spirit that has guided it for 50 years, the cable industry is well positioned to take on these challenges.
Robert Sachs is president and CEO of the National Cable & Telecommunications Association.