Case of the Disappearing TV Homes
Cable Guy Alan Breznick, Cable/Video Practice Leader, Light Reading 12/18/2006
In a pointed press release issued last week, the Television Bureau of Advertising (TVB) makes the case that cable penetration of U.S. homes hit a 16-year low in November. Basing its conclusion on its latest analysis of data from Nielsen Media Research, the broadcasting trade group reckons that cable operators have lost a whopping 2.6 million subscribers over the past year, chopping the industry's customer count from a cool 71.0 million to 68.4 million.
As a result, the TVB contends, the cable penetration rate slipped from 64.8 percent last fall to 62.1 percent last month, the industry's lowest since November 1990. At the same time, it says, the take rate of alternate delivery systems (ADS), mainly consisting of satellite TV providers, climbed from 20.8 percent to 24.5 percent.
Armed with this fresh data, the TVB is trying to convince local cable advertisers that they're "paying for eyeballs that just aren't there." In one particularly notable claim, the Bureau contends that 45 TV markets now have ADS penetration rates of at least 40 percent, including such decent-sized ones as Shreveport, La. and Springfield, Mo.
Whether the claim is true or not, it's ironic to see the broadcasters make this "underreach" argument. After all, cable networks have been screaming for years that the broadcast nets don't reach nearly as many homes as they say they do. So things have now come full circle.
Just wait. It's only a matter of time before pay TV rivals DirecTV Group Inc. (NYSE: DTV), EchoStar Satellite LLC , and even Verizon Communications Inc. (NYSE: VZ) chime in too, arguing that neither the broadcast stations nor the cable networks reach as many homes as they claim. Then advertisers can feel shortchanged by all the TV players.
— Alan Breznick, Site Editor, Cable Digital News