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Report: Satellite Fights to Keep Up With Cable

17 Mar, 2008 By: Erik Gruenwedel

Satellite television continues to market set-top boxes, high-def content and premium channels in an effort to bridge the gap with cable and overcome a slumping housing market, according to a new report.

The satellite industry over the past several years has languished relative to cable, which has blossomed with more than 60% market share in the United States, compared to nearly 29% for satellite, according to In-Stat, a Scottsdale, Ariz.-based technology research firm.

Worldwide satellite penetration is nearly 19% of the TV market, with cable at roughly 31%.

Satellite set-top box unit shipments globally in 2008 are expected to eclipse 80 million — hitting 83.5 million units annually in 2010, according to In-Stat.

High-definition content digital video recorders will spearhead growth in mature markets while new subscribers drive emerging markets in Asia/Pacific, India and China, according the report.

“Within mature markets, demand for set-top boxes is expected to soften, if not decline,” says Michael Inouye, In-Stat analyst. “These markets will have growth in the number of premium boxes, and to some extent, these units will bolster the market.”

He said the ongoing housing slump and mortgage meltdown has eroded consumer willingness to pay for expensive satellite and cable channels and services.

Inouye said the satellite industry added just 85,000 net subscribers in the last quarter, which he said was quite low.

“People are basically canceling their service,” he said. “They are looking at the economics of it and realize they are not going to have satellite or a similar services.

“If you have all the premium services, it can get pretty expensive.”

Inouye said global HD and DVR penetration in satellite market approached 40% in 2007. That percentage is expected to increase, he said, as both DirecTV and Dish Network aggressively promote the premium services — including Dish, which Inouye said is offering free DVR service on select programs.

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