Cable and Satellite Industries Lil Context Cable Satellite

Cable and Satellite Industries

Lil Context • Cable + Satellite= – Multi-Channel Television Industries • 87 -90% of U. S. TV households get programming. • 60% of Americans households subscribe to cable. This means… – Most Americans PAY for service!!! • 347 million global subscribers • Industry employs about 300, 000, $178 B

History • 1948, retransmitting broadcast signals in rural areas • CATV – Community Antenna Television – Astoria, Oregon – Leroy E. "Ed" Parsons – $3, $125

History/Reg. • First commercial services beginning in 1949 – Pay fee=get city network signals – CATV systems set up across the rural U. S. • 1949, the FCC catches wind • In the next decade some other parties catch wind aren’t too fond of CATV? – Local Stations – Networks

History/Reg. Cont’d • In the 1960 s, the Supreme Court upholds the FCC’s right to regulate CATV • CATV as an industry slowly developed until the 1970 s? ? ? – New programming – New Services – Basic, Premium and… – SUPERSTATIONS – Deregulation? ? ?

Funding? ? ? • • Advertising Installation Services Basic Cable subscriptions Premium Cable subscriptions

Regulation? • Regulates mainly… – content • Not? – Rate price – Cross ownership • 1990 s, gov. regulated…$20 for plans • From 1993 -98, the FCC resolved… – 18, 000 complaints – In 5, 700 communities – Ordering $100 million in consumer refunds to 40 million cable subscribers

Regulation Cont’d • From 1998 -2003, cable rates soar 3 x’s the inflation rate – Up 59% since 1998 • So, what happened? ? ? – 1996 Telecommunications Act – Allows Cable providers to own ISPs and phone companies – Gov. does not have the right to keep cable rates in check

Markets • Local/National – Audiences and advertisers • Most lucrative market? – Basic cable, 55% of industry revenues – Premium/Pay, 11% of revenues – Other 34% • Rentals, installation fees, modems, pay-per-view • Phone and ISPs? ? ?

Competition? ? ?

Major Players • Comcast – 2002, bought AT&T Broadband • Time Warner • Charter Communications • Cox Communications

• 26. 7 M subscribers • $22. 25 B in revenues • Lobby against "family tier" and "a la carte" bills • Hire family members of mayors, congressmen, senators, etc. • Brian and Ralph Roberts own 1/3 stock

Resistance? ? ?

The Present Market • In 2008 digital cable subscribers up 14% • Satellite subscribers 6%. • 2008, 85% of households subscribed to either cable or satellite. • Top 20 multiple system operators (MSOs) serve? ? ? – 90 percent of cable subscribers in U. S. – This indicates…? ? ?