US Cable TV Operator Survey: "Multi-Play" Services Improve ARPU

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US Cable TV Operator Survey: "Multi-Play" Services Improve ARPU

Service: Multimedia Broadband Services & Infrastructure
Report Number: IN0501843MB
Publication Date: February 2005
Number of Pages: 78
Report Price: $3,995 U.S. Dollars
Analyst: Gerry Kaufhold & Mike Paxton

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Abstract
In-Stat's sixth annual survey of US Cable TV system operators shows that total Cable TV subscriber growth is flattening out, but long-term revenue gains can still be obtained by Cable TV operators who continue expanding their mix of new digital services.

Twenty-three respondents have more than one hundred thousand subscribers on their systems, six have more than 50,000 subscribers, and six have between 20,000 up to 49,999 subscribers. Two thirds of respondents said that 100% of their subscribers have access to digital Cable services. More than three-fourths of respondents indicated that they have at least 750 MegaHertz of bandwidth available on their systems.

Key results from this extensive survey include:
- High-Speed Data (HSD) via cable modem continues to grow
- High Definition TV And PVRs are the “hot” new services
- Bundling helps make Cable a preferred telecoms provider
- Voice telephone services are being deployed
- CableCARD devices are being supported, but attitudes are mixed
- Capital Expenditures trend appears to be flat

Cable operators need to obtain more revenue from each subscriber that they still have. Seventy-eight percent of our respondents reported an increase in their ARPU over the past twelve months.

Respondents reported that they are well aware of looming competition for digital video services being planned by their local telephone companies. Twenty-one respondents expect to see competing video services, mainly from Verizon or SBC.

Table of Contents

Executive Summary
- Fifty Respondents “Answered Our Call”
- All Four Key Market Segments Included
- All Sizes Of Systems Participated
- Penetration Of Digital Services Improving, With Room To Grow
- Available Bandwidth Is Above 750 MegaHertz For Most
- High-Speed Data (HSD) Via Cable Modem Continues To Grow
- High Definition TV And PVRs Are The “Hot” New Services
- Bundling Helps Make Cable A Preferred Telecom Provider
- Average Revenue Per Unit (ARPU) Is Improving
- CableCARD Devices Are Being Supported, But Attitudes Are Mixed
- Capital Expenditures Trend Appears To Be Flat
- Video Services From Competing Local Telephone Companies
Methodology
- Previously Published Reports That Provide Forecasts And More In-Depth Analysis
Overview: The US Cable TV Industry
- US Cable Industry Statistics
- Forget the Triple Play, and Quadruple Play, We Now Have A “Multi-Play” Of Multiple Services
The Hierarchy of Our Presentation
Overview Of Key System Characteristics
- Fifty Respondents Represent A Good “Mix” Of The Industry
- Relative Market Ranking Of Local Cable TV System
- Number of Basic Cable Subscribers In Local System
- Annual Subscriber Growth Of Local Cable System
- Number Of Net New Subscribers During Past 12 Months
- Number Of Net Fewer Subscribers During Past 12 Months
Digital Cable TV Services Snapshot
- Subscribers With Access To 2-Way Digital Cable Services
- Actual Subscribers To Digital Cable TV Services
Channel Allocation Summaries And Future Prospects
- The Importance Of Individual 6-MHz Video Channels To A Cable TV System
  - Bandwidth Available On Main Cable Trunk
  - Number Of Headends Connected In Your Cable TV System
  - Number Of 6MHz Channels On Main Cable Trunk
  - Number Of 6-MHz Channels Available For New Uses
  - Number Of 6-MHz Channels Available In 12 Months
  - 6-MHz Channels In Use For Analog Video Services
  - 6-MHz Channels In Use For Digital Services
  - 6-MHz Channels Expected For Digital Services In 12 Months
  - 6-MHz Channels In Use for Video On Demand Services
  - 6-MHz Channels for VOD in 12 months
  - 6-MHz Channels In Use For High Definition TV Services
  - 6-MHz Channels For HDTV in 12 Months
  - 6-MHz Channels In Use for Cable Modem Services
  - 6-MHz Channels For Cable Modems in 12 Months
  - 6-MHz Channels In Use for Telephone Services
  - 6-MHz for Telephone Services in 12 Months
Cable Modem Data Services
- Percent Of All Cable Subscribers Using Cable Modem Services
- Percent Of Cable Modem Subscribers That Are Businesses
Subscribers Using A Set Top Box
- Percent of Subscribers Using Any Type of Cable Set Top Box
- Average Number Of Set Top Boxes Per Household
- Percent of Subscribers Using An Analog Set Top Box
- Percent Of Subscribers Using A Digital Set Top Box
- Percent Of Digital Subscribers With A Hard Disk Drive
Subscribers Using Advanced Digital Cable Services - VOD, HDTV, PVR
- Video On Demand Services
  - Currently Offer VOD Services Or Plan To Offer In 12 Months
- High Definition TV (HDTV) Services
  - Currently Offer HDTV Services Or Plan To In 12 Months
  - Percent Of Subscribers Currently Using HDTV Services
- Personal Video Recorder (PVR) Services
  - Currently Offer PVR Or Plan To Within 12 months
  - Percent Of Subscribers Currently Using PVR Services
Attitudes And Usage Of CableCARD Devices And Technologies
- Currently Support CableCARD Or Plan To In 12 Months
- CableCARD Devices Already Shipped To Subscribers
- Will CableCARDs Be A Benefit To Your Cable System
Penetration Of Advanced Digital Cable Services And Bundling Of Multiple Services
- Penetration Of Digital Video Services
- Penetration Of High Speed Data (HSD) Cable Modem Services
- Penetration Of Telephone Services On Your Cable TV System
- Percentage of Subscribers with 2 Services in a Bundle
- Percent Of Subscribers With 3 Services In A Bundle
Average Revenues Per Unit (ARPU)
- Percentage Increase In ARPU Over Past 12 Months
Customer Service Call Center
- Do You Have Special Training To "Up Sell' Customers
Competition Likely From Local Telephone Company (Telco)
- A Trio Of In-Stat Reports Provide Deeper Understanding
- Local Cable TV Operators Are Well Aware Of The Coming Competition From Telcos And Are Taking Steps
- Do You Expect Video Services From A Competing Telco
- Which Telco Will Be Competing With Video Services
- How Will Your Cable System Fare Against Telco Competition
Outlook For Capital Expenditures (CAPEX)
Final Thoughts
- The Availability Of Advanced Video Services Is Increasing, But Their Penetration Levels Remain Modest
- Few Cable Subscribers Take Any Type Of Service Bundle
- Cable Operator ARPU Is On The Rise
- Many Cable Operators Are Unconvinced About The Viability Of CableCARD Devices
- Competition Is Coming From Large Telephone Companies

List of Tables

Table 1. Key Statistics for US Cable Television Industry
Table 2. Relative Market Ranking Of Respondents' Local Cable Television System (percent of respondents by market size, number of respondents by market size)
Table 3. Respondents' System Size By Number of Basic Cable Subscribers (percent of respondents by size of local system, number of respondents by system size)
Table 4. Annual Subscriber Growth of Local Cable System (percentage and number of respondents)
Table 5. Number Of Net New Subscribers In Past 12 Months (percentage and number of respondents)
Table 6. Number Of Net Fewer Subscribers In Past 12 Months (percentage and number of respondents)
Table 7. Percent Of Subscribers With Access To 2-Way Digital Cable Services (percentage and number of respondents)
Table 8. Actual Number Of Subscribers Taking Digital Cable TV Services (percentage and number of respondents)
Table 9. Bandwidth Available On Main Cable Trunk (percentage and number of respondents)
Table 10. Number Of Headends Connected In Your Cable TV System (percentage and number of respondents)
Table 11. Number Of 6MHz Channels On Main Cable Trunk (percentage and number of respondents)
Table 12. Number Of 6-MHz Channels Available For New Uses (percentage and number of respondents)
Table 13. Number Of 6-MHz Channels Available In 12 Months (percentage and number of respondents)
Table 14. Number Of 6-MHz Channels In Use For Analog Video Services (percentage and number of respondents)
Table 15. 6-MHz Channels In Use For Digital Services (percentage and number of respondents)
Table 16. 6-MHz Channels Expected For Digital Services In 12 Months (percentage and number of respondents)
Table 17. 6-MHz Channels In Use for Video On Demand Services (percentage and number of respondents)
Table 18. 6-MHz Channels for VOD in 12 months (percentage and number of respondents)
Table 19. 6-MHz Channels In Use For High Definition TV Services (percentage and number of respondents)
Table 20. 6-MHz Channels For HDTV in 12 Months (percentage and number of respondents)
Table 21. 6-MHz Channels In Use for Cable Modem Services (percentage and number of respondents)
Table 22. 6-MHz Channels For Cable Modems in 12 Months (percentage and number of respondents)
Table 23. 6-MHz Channels In Use for Telephone Services (percentage and number of respondents)
Table 24. 6-MHz for Telephone Services in 12 Months (percentage and number of respondents)
Table 25. Percent Of Subscribers Using Cable Modem Services (percentage and number of respondents)
Table 26. Percent Of Cable Modem Subscribers That Are Businesses (percentage and number of respondents)
Table 27. Percent of Subscribers Using Any Type of Cable Set Top Box (percentage and number of respondents)
Table 28. Average Number Of Set Top Boxes Per Household By Cable System (percentage and number of respondents)
Table 29. Percent of Subscribers Using An Analog Set Top Box (percentage and number of respondents)
Table 30. Percent Of Subscribers Using A Digital Set Top Box (percentage and number of respondents)
Table 31. Percent Of Digital Subscribers With A Hard Disk Drive Set Top Box (percentage and number of respondents)
Table 32. Currently Offer VOD Services (percentage and number of respondents)
Table 33. Plan To Be Offering VOD Services in 12 Months (percentage and number of respondents)
Table 34. Percent Of Subscribers Currently Using VOD Services (percentage and number of respondents)
Table 35. Currently Offer HDTV Services (percentage and number of respondents)
Table 36. Plan To Offer HDTV Service Within 12 Months (percentage and number of respondents)
Table 37. Percent Of Subscribers Currently Using HDTV Services (percentage and number of respondents)
Table 38. Currently Offer PVR Services (percentage and number of respondents)
Table 39. Plan To Offer PVR Service Within 12 Months (percentage and number of respondents)
Table 40. Percent Of Subscribers Currently Using PVR Services (percentage and number of respondents)
Table 41. Currently Support CableCARD (percentage and number of respondents)
Table 42. Plan To Support CableCARD Within 12 Months (percentage and number of respondents)
Table 43. CableCARD Devices Already Shipped To Subscribers (percentage and number of respondents)
Table 44. Will CableCARDs Be A Benefit To Your Cable System (percentage and number of respondents)
Table 45. Penetration Of Digital Video Services (percentage and number of respondents)
Table 46. Penetration Of High Speed Data (HSD) Cable Modem Services (percentage and number of respondents)
Table 47. Penetration Of Telephone Services On Your Cable TV System (percentage and number of respondents)
Table 48. Percentage of Subscribers with 2 Services in a Bundle (percentage and number of respondents)
Table 49. Percent Of Subscribers With 3 Services In A Bundle (percentage and number of respondents)
Table 50. Did ARPU Increase, Decrease Or Stay The Same (percentage and number of respondents)
Table 51. Percentage Increase In ARPU Over Past 12 Months (percentage and number of respondents)
Table 52. Does Your System Have A Local Call Center (percentage and number of respondents)
Table 53. Do You Have Special Training To "Up Sell” Customers (percentage and number of respondents)
Table 54. Do You Expect Video Services From A Competing Telco (percentage and number of respondents)
Table 55. Which Telco Will Be Competing With Video Services (percentage and number of respondents)
Table 56. How Will Your Cable System Fare Against Telco Competition (percentage and number of respondents)
Table 57. Size of CAPEX Budget in 2004 (percentage and number of respondents)
Table 58. Estimated Size of CAPEX Budget in 2005 (percentage and number of respondents)

List of Figures

Figure 1. Basic Cable TV Subscriber Growth in the US, 1995 – 2004 (US Basic Cable TV Subscribers In Millions)
Figure 2. Relative Market Ranking Of Respondents' Local Cable Television System (percent of respondents by market size)
Figure 3. Respondents' System Size By Number of Basic Cable Subscribers (percent of respondents by size of local system)
Figure 4. Annual Subscriber Growth of Local Cable System (percentage of respondents)
Figure 5. Number Of Net New Subscribers In Past 12 Months (percentage of respondents)
Figure 6. Number Of Net Fewer Subscribers In Past 12 Months (percentage of respondents)
Figure 7. Percent Of Subscribers With Access To 2-Way Digital Cable Services (percentage of respondents)
Figure 8. Actual Percentage Of Subscribers Taking Digital Cable TV Services (percentage of respondents)
Figure 9. Bandwidth Available On Main Cable Trunk (percentage of respondents)
Figure 10. Number Of Headends Connected In Your Cable TV System (percentage of respondents)
Figure 11. Number Of 6MHz Channels On Main Cable Trunk (percentage of respondents)
Figure 12. Number Of 6-MHz Channels Available For New Uses (percentage of respondents)
Figure 13. Number Of 6-MHz Channels In 12 Months (percentage of respondents)
Figure 14. Number Of 6-MHz Channels In Use For Analog Video Services (percentage of respondents)
Figure 15. 6-MHz Channels In Use For Digital Services (percentage of respondents)
Figure 16. 6-MHz Channels Expected For Digital Services In 12 Months (percentage of respondents)
Figure 17. 6-MHz Channels In Use for Video On Demand Services (percentage of respondents)
Figure 18. 6-MHz Channels for VOD in 12 months (percentage of respondents)
Figure 19. 6-MHz Channels In Use For High Definition TV Services (percentage of respondents)
Figure 20. 6-MHz Channels For HDTV in 12 Months (percentage of respondents)
Figure 21. 6-MHz Channels In Use for Cable Modem Services (percentage of respondents)
Figure 22. 6-MHz Channels For Cable Modems in 12 Months (percentage of respondents)
Figure 23. 6-MHz Channels In Use for Telephone Services (percentage of respondents)
Figure 24. 6-MHz for Telephone Services in 12 Months (percentage of respondents)
Figure 25. Percent Of Subscribers Using Cable Modem Services (percentage of respondents)
Figure 26. Percent Of Cable Modem Subscribers That Are Businesses (percentage of respondents)
Figure 27. Percent of Subscribers Using Any Type of Cable Set Top Box (percentage of respondents)
Figure 28. Average Number Of Set Top Boxes Per Household By Cable System (percentage of respondents)
Figure 29. Percent of Subscribers Using An Analog Set Top Box (percentage of respondents)
Figure 30. Percent Of Subscribers Using A Digital Set Top Box (percentage of respondents)
Figure 31. Percent Of Digital Subscribers With A Hard Disk Drive Set Top Box (percentage of respondents)
Figure 32. Currently Offer VOD Services (percentage of respondents)
Figure 33. Plan To Be Offering VOD Services in 12 Months (percentage of respondents)
Figure 34. Percent Of Subscribers Currently Using VOD Services (percentage of respondents)
Figure 35. Currently Offer HDTV Services (percentage of respondents)
Figure 36. Plan To Offer HDTV Service Within 12 Months (percentage of respondents)
Figure 37. Percent Of Subscribers Currently Using HDTV Services (percentage of respondents)
Figure 38. Currently Offer PVR Services (percentage of respondents)
Figure 39. Plan To Offer PVR Service Within 12 Months (percentage of respondents)
Figure 40. Percent Of Subscribers Currently Using PVR Services (percentage of respondents)
Figure 41. Currently Support CableCARD (percentage of respondents)
Figure 42. Plan To Support CableCARD Within 12 Months (percentage of respondents)
Figure 43. CableCARD Devices Already Shipped To Subscribers (percentage of respondents)
Figure 44. Will CableCARDs Be A Benefit To Your Cable System (percentage of respondents)
Figure 45. Penetration Of Digital Video Services (percentage of respondents)
Figure 46. Penetration Of High Speed Data (HSD) Cable Modem Services (percentage of respondents)
Figure 47. Penetration Of Telephone Services On Your Cable TV System (percentage of respondents)
Figure 48. Percent Of Subscribers With 2 Services In A Bundle (percentage of respondents)
Figure 49. Percent Of Subscribers With 3 Services In A Bundle (percentage of respondents)
Figure 50. Did ARPU Increase, Decrease Or Stay The Same (percentage of respondents)
Figure 51. Percentage Increase In ARPU Over Past 12 Months (percentage of respondents)
Figure 52. Does Your System Have A Local Call Center (percentage of respondents)
Figure 53. Do You Have Special Training To "Up Sell” Customers (percentage of respondents)
Figure 54. Do You Expect Video Services From A Competing Telco (percentage of respondents)
Figure 55. Which Telco Will Be Competing With Video Services (percentage of respondents)
Figure 56. How Will Your Cable System Fare Against Telco Competition (percentage of respondents)
Figure 57. Size of CAPEX Budget in 2004 (percentage of respondents)
Figure 58. Estimated Size of CAPEX Budget in 2005 (percentage of respondents)

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