- SCOPE AND THEMES
- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
- EXECUTIVE SUMMARY
- A market nearing saturation, but still growing
- Marketing bundles and packages is the norm
- Add-on services and ad revenues drive sales
- New ad models are necessary
- Internet habits now dictate TV expectations
- More younger consumers side-step traditional pay-TV
- Big screens call for quality programming
- A highly consolidated marketplace
- Satellites grew and are poised for further growth
- MVPD brands emphasize their strongest features
- Yet, consumers do not truly perceive differentiation among MVPDs
- Advertising
- Consumer attitudes towards pay-TV
- MARKET SIZE AND FORECAST
- Key points
- Bundling drives customer acquisition
- Bigger is better
- Lower cost of hardware
- Market valued at $102 billion in 2007
- Sales
- Figure 1: Total U.S. sales of satellite and cable pay-TV services, at current prices, 2002-12
- Figure 2: Total U.S. sales of satellite and cable pay-TV services, at inflation-adjusted prices, 2002-12
- Subscriptions
- Figure 3: Subscriptions and ARPU to satellite and cable pay-TV services, 2002-07
- MARKET SIZE BY PROVIDER TYPE
- Cable
- Subscription and sales growth
- Figure 4: Total U.S. sales of cable pay-TV services, at current prices, 2002-12
- Figure 5: Total U.S. sales of cable pay-TV services, at inflation-adjusted prices, 2002-12
- Figure 6: Subscriptions to cable pay-TV services, 2002-07
- Satellite
- Subscription and sales growth
- Figure 7: Total U.S. sales of satellite pay-TV services, at current prices, 2002-12
- Figure 8: Total U.S. sales of satellite pay-TV services, at inflation-adjusted prices, 2002-12
- Figure 9: Subscriptions to satellite pay-TV services, 2002-07
- COMPETITIVE CONTEXT
- Key points
- Online video
- Figure 10: Ownership of device for watching online video on the home television, by age, January 2008
- 18-24s lead the way
- Figure 11: Consumer demand for “on-demand” programming, by age, January 2008
- Figure 12: Consumer demand for online video, by age, January 2008
- Apple and iTunes
- Telcos enter the pay-TV fray
- Mobile: thank goodness for couch potatoes
- Figure 13: Mobile video access, by age, January 2008
- Leveraging vertical integration to create exclusive content
- Addressing conflicts of interest with content providers through punitive measures
- SEGMENT PERFORMANCE—OVERVIEW
- Basic vs. premium vs. add-on and advertising revenue in cable provider sales
- Figure 14: Total U.S. sales of satellite and cable pay-TV services, by satellite or cable provider, 2002 and 2007
- Figure 15: U.S. sales and forecast of cable pay-TV sales, at current prices, by segment, 2002-08
- Figure 16: U.S. cable subscriptions, 2002-08
- SEGMENT PERFORMANCE—BASIC SALES FROM CABLE PROVIDERS
- Figure 17: Total U.S. sales of cable basic television service, at current prices, 2002-08
- Figure 18: Total U.S. sales of cable basic television service, at inflation-adjusted prices, 2002-07
- SEGMENT PERFORMANCE—PREMIUM SALES FROM CABLE PROVIDERS
- Figure 19: Total U.S. sales of premium cable television service, at current prices, 2002-08
- Figure 20: Total U.S. sales of premium cable television service, at inflation-adjusted prices, 2002-08
- SEGMENT PERFORMANCE—ADDITIONAL SERVICES AND ADVERTISING SALES FOR CABLE PROVIDERS
- Figure 21: Total U.S. sales of additional services and advertising sales for cable providers, at current prices, 2002-07
- Figure 22: Total U.S. sales of additional services and advertising sales for cable providers, at inflation-adjusted prices, 2002-07
- MARKET DRIVERS: THE ECONOMY AND HOME THEATERS
- Economy
- Making use of the in-home theater
- Figure 23: Penetration of HDTV, 2004-07
- Figure 24: Sizes of television(s) owned, 2004-07
- Figure 25: Average # of television(s) per household, May 2006-June 2007
- Figure 26: Average cost of most recently purchased TV, by gender and age, May 2006-June 2007
- MARKET DRIVERS: THE DIGITAL CONVERSION
- Less than a year until the end of analog signals
- The transition to digital in cable service
- Figure 27: Pay-TV revenue, analog vs digital, 2002-06
- Access to VOD rising
- Figure 28: Pay-per-view and video-on-demand usage, by year, 2005-07
- Figure 29: Pay-per-view usage, 2003-07
- Figure 30: Video-on-demand usage, 2005 and 2007
- Impact of the DVR on subscriptions and advertising revenue
- DVR penetration
- Figure 31: DVR ownership, by type of service, May 2006 and 2007
- LEADING COMPANIES
- Key points
- Figure 32: Pay-TV subscriptions, by leading companies, 2006 and 2007
- Figure 33: Video revenue, by leading companies, 2006 and 2007
- BRAND SHARE
- Key points
- Introduction
- Sales
- Figure 34: Total U.S. sales of satellite and cable pay-TV services, satellite vs cable, 2002-12
- Figure 35: Total U.S. sales of satellite and cable pay-TV services, satellite vs cable, 2006 and 2007
- Cable vs. satellite: recent switches in service, and those considering switches
- Figure 36: Attitudes towards switching pay-TV service, January 2008
- Consumers not seeing the difference between cable and satellite
- Figure 37: Consumer perception of cable vs. satellite, January 2008
- Figure 38: Level of interest in who provides television service, January 2008
- Subscriptions
- Figure 39: Satellite and cable pay-TV subscriptions, 2002-07
- Figure 40: Satellite and cable pay-TV subscriptions, satellite vs cable, 2006 and 2007
- BRAND QUALITIES
- Comcast
- Time Warner
- DirecTV
- Dish
- INNOVATION AND INNOVATORS
- Comcast
- Time Warner
- DirecTV
- Dish
- ADVERTISING AND PROMOTION
- Introduction
- Adspend on standalone pay-TV service
- Figure 41: Media spend to market pay-TV as an individual service, by selected brands, 2005 and 2006
- Adspend on bundled pay-TV service
- Figure 42: Media expenditures, by selected brands, 2005 and 2006
- Satellite and telcos tackle cable directly
- Television ads target specific groups
- Figure 43: Xtreme Clip: Dish HD Free For 6 Months & Free DVR Upgrade, January 2008
- Figure 44: Xtreme Clip: Verizon And ESPN Employees Meet, May 2007
- Figure 45: Xtreme Clip: Man In Restaurant Promotes NFL Sunday Ticket, August 2007
- Figure 46: Xtreme Clip: People Build Cable TV Station, March 2007
- Figure 47: Xtreme Clip: Heroes, May 2007
- Figure 48: Xtreme Clip: Blackboard/Free High Speed Internet Offer, August 2007
- Pull marketing on CGM sites online
- PENETRATION OF PAY-TV PRODUCTS
- Figure 49: Incidence of pay-TV subscription, 2003-07
- Figure 50: Incidence of pay-TV subscription, by age, May 2006-June 2007
- Figure 51: Incidence of pay-TV subscription, by household income, May 2006-June 2007
- ATTITUDES TOWARD ALTERNATIVE PRICING
- Minority interested in premium-only or pay-per-show offers
- Figure 52: Attitudes towards premium-only and pay-per-show models, January 2008
- Majority interested in creating their own channel package
- Figure 53: Attitudes towards “à la carte” TV options, January 2008
- REASONS FOR NOT SUBSCRIBING
- Figure 54: Reasons for not subscribing to pay-TV, by gender and age, January 2008
- ATTITUDES TOWARD ADVERTISING
- Did the DVR really change anything?
- Figure 55: Attitudes towards TV advertising, by gender, May 2006-June 2007
- Figure 56: Attitudes towards TV advertising, by age, May 2006-June 2007
- Figure 57: Attitudes towards TV advertising and DVR capability, January 2008
- Figure 58: Attitudes towards TV advertising and DVR capability, by age, January 2008
- Attitudes toward product placement
- Figure 59: Attitudes towards product placement, May 2006-June 2007
- THE IMPACT OF RACE AND ETHNICITY
- Key points
- Asians and Hispanics lag in pay-TV subscription
- Figure 60: Pay-TV penetration, by race/ethnicity, May 2006-June 2007
- Blacks and Hispanics are commercial-friendly
- Figure 61: Attitudes towards advertising—18-34s, by race/ethnicity, May 2006-June 2007
- Figure 62: Attitudes towards advertising—over-35s, by race/ethnicity, May 2006-June 2007
- Figure 63: Attitudes towards advertising—households with income under $75K, by race/ethnicity, May 2006-June 2007
- Figure 64: Attitudes towards advertising—households with income over $75K, by race/ethnicity, May 2006-June 2007
- Young Asians love to hate product placement
- Figure 65: Attitudes towards product placement—18-34s, by race/ethnicity, May 2006-June 2007
- Figure 66: Attitudes towards product placement—over-35s, by race/ethnicity, May 2006-June 2007
- Figure 67: Attitudes towards product placement—households with income under $75K, by race/ethnicity, May 2006-June 2007
- Figure 68: Attitudes towards product placement—households with income over $75K, by race/ethnicity, May 2006-June 2007
- Source: Simmons NCS/Mintel
- Black consumers tend to own more TVs per household
- Figure 69: Average # of television sets owned—18-34s, by race/ethnicity, May 2006-June 2007
- Figure 70: Average # of television sets owned—over-35s, by race/ethnicity, May 2006-June 2007
- Figure 71: Average # of television sets owned—households with income under $75K, by race/ethnicity, May 2006-June 2007
- Figure 72: Average # of television sets owned—households with income over $75K, by race/ethnicity, May 2006-June 2007
- APPENDIX: TRADE ASSOCIATIONS
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