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Cable Companies May Invest in HD Capacity

Jul 10, 2008  •  Post A Comment

If you can’t beat ’em…
Cable companies looking to win back customers who have moved over to satellite providers and other multichannel service operators may be rethinking their strategy of focusing on high-definition video-on-demand offerings. Instead, they’re hoping an increased inventory of HD linear channels will prove attractive.
Companies such as Time Warner Cable may capitalize on satellite’s flattening subscriber base by increasing HD selection, Sanford C. Bernstein analyst Craig Moffett wrote in a note to clients this week.
TWC, whose 15 million subscribers trail only Comcast’s 25 million among U.S. cablers, added about a dozen HD channels to its Los Angeles-area offerings after press reports said L.A. had the smallest HD selection of any major city served by TWC, Web site Engadgethd.com reported last week.
“Cable’s physical plant has ample capacity to remain competitive with DirecTV’s 100 channels of HDTV, and even Verizon’s deployment of fiber to the premises, without significant reinvestment,” wrote Mr. Moffett, who has an “outperform” rating on the stock.
Nevertheless, Comcast, which earlier this year countered satellite leader DirecTV’s claim of HD superiority by expanding its on-demand offerings in HD, may take a further monetary plunge.
The company, whose approximately 45 HD channels are less than half of DirecTV’s inventory, will boost capital expenditures in order to try to approach the satcaster’s total of 95 HD channels, Multichannel News reported this week. The paper cited Collins Stewart analyst Thomas Eagan, who estimated a “big 2009 capex number.”
Comcast and Time Warner Cable lost a collective 2,000 basic-cable subscribers during the first quarter from a combined 38 million subscribers as of the end of last year. The drop likely was a result of more competition from satellite TV companies and fiber-optic services such as Verizon’s FiOS and AT&T’s U-verse. Both cable companies beat analysts’ estimates, largely on gains in high-speed Internet and telephone-service customers, not cable subscribers.

26 Comments

  1. Most of the reason Comcast is loosing customers revolves around poor customer support and poor HD picture quality. Comcast in it’s efforts to increase the number of HD channels is trying to squeeze three HD channels in one QAM slot. The normal number of HD channels for maximum picture quality should be two. Currently they are doing it with some movie channels since this requires extra processing. I hope Comcast (and the other cable companies) will go back to 100% picture quality. They can do this by investing in equipment to expand the amount of space the have available. Most cable systems are 750mhz or less. They need to expand this to at least one ghz.
    The cable companies will soon have new set top boxes which will have this capability and also with the ability to use mpeg4. This combination along with switched video should give them enough room to do it right! To be fair Comcast’s HD VOD products are still quite good.

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