Study: 71M HD Subscribers By 2012
Kagan urges cable operators to increase high-def programming..
By Swanni
That's according to a new report from the research firm, SNL Kagan.
The company estimates that roughly 71 million Americans will subscribe to a high-def programming package by 2012.
Consequently, Kagan says cable operators must focus on providing more HD programming to keep pace with DIRECTV which is rapidly expanding its high-def lineup.
"More than one-third of homes now have HDTV sets, with that number growing each year, so cable networks will face increasing pressure to offer more HD content," the company stated.
Kagan said 74 HD networks have launched since 2003. But due to increasing competition, the firm says high-def channels may have to trim their demands for higher programming fees from the TV providers.
"To gain wider distribution, simulcast (HD) networks will have to sacrifice license fees, which account for about half of a traditional cable network’s revenue stream. HD networks will try to compensate by increasing ad revenues, but it will be challenging to prove to advertisers that simulcast networks reach new viewers and therefore demand additional ad dollars," Kagan stated.
Still, the company estimates that revenue for HD networks will grow from $465.1 million in 2007 to nearly $2 billion by 2012.
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