Cable TV is no longer satellite’s poor relation. Not only is the rate of cable connections going up, but its target audience is significantly differentiated

In the last three months of 1994 broadband cable passed more than 400,000 new homes, bringing the total to more than 4 million or one in five British residences, according to the latest Independent Television Commission statistics. The number taking cable TV is now close to 1 million – one in five satellite TV homes. Cable is no longer dish’s poor relation. Close to half of all new satellite TV connections in 1994 were broadband cable, not dish.

Cable may be marching forward, but it has a long way to go. There are 3 million dish homes compared with less than 1 million broadband. And dish is the only source of satellite TV for 80 per cent of the country.

Moreover, dish homes are not just ones that can’t get cable, they are different types of household. Movies, sport and general entertainment drive dish subscriptions. In dish homes these genres account for 70 per cent of all satellite TV viewing, with sport and movies alone taking more than 40 per cent.

Cable homes are different. Only 50 per cent subscribe to Sky Sports, compared with about 80 per cent of dish homes. As few as 50 per cent take a movie channel, compared with 70 per cent of dish homes. Dish and cable residences have different viewing patterns, with light entertainment, music and children’s programmes receiving more viewing on cable.

This seems strange when you consider that the channels available on each are so similar. In broadband areas many subscribers are attracted by cheap cable telephone services and take cable television as part of the package. They are not inclined to take the extra pay sport and movie channels.

Dish customers go out to buy satellite TV, and retailers get incentives from BSkyB to sell the total package: the dish, multichannel package, movies and sport. The winning combination of cable TV, cable phones and door-to-door selling results in higher cable home penetration but a lower pay to basic ratio.

By 2000, Continental Research forecasts that 8 million-plus homes, about 35 to 40 per cent of British residences, will be receiving satellite TV through cable or dish, and that most will still be dish homes. Cable will be gaining new subscribers faster than dish if it maintains its new impetus. By 1997, we could well see more new cable than dish installations each year.

In the latest month’s BARB data, Sky Sports alone took seven per cent of viewing in satellite homes, more than any other satellite channel, than BBC2 or Channel 4. This is because it carries Premier League football ,which were the top rating satellite TV programmes.

The success of cable and dish TV depends on first-rate popular programming. This will become increasingly expensive and uncommon as cable operators, BSkyB, ITV, BBC and others compete for top-rated programmes.

Continental Research

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