Cable TV's Future

Report Outline
Problems and Prospects
Spotlight on Programming
Competing Technologies
Impact of Deregulation
Special Focus

Problems and Prospects

Growth of Cable Challenges Networks

The new television season has just begun and executives at ABC, CBS and NBC are anxiously awaiting the public's judgment of their fall lineups. But this year the networks have something extra to worry about, for, as millions of Americans are finding out each year, there is much more on television than network fare. About a third of American households with television sets now subscribe to cable services. Five years ago there were fewer than 3,900 cable TV systems across the country serving about 12 million subscribers. Today there are more than 4,700 systems with nearly 25 million subscribers. Because of the growing popularity of cable, the networks' share of the television audience is dwindling. It stood at about 80 percent last year, is around 77 percent today, and could drop below 70 percent by the end of the decade.

There is no doubt that the cable industry is growing rapidly. But the industry also has problems. For one thing, it is being hit especially hard by today's economic uncertainties. The cost of wiring homes is climbing rapidly, as are start-up and programming costs. In addition, new communications technologies, including microwave and direct satellite TV transmission, have begun to take away a portion of cable's market. Furthermore, local jurisdictions, which award cable franchises and oversee the operators, have become increasingly knowledgeable about the business and demanding more from cable operators.

Still another problem for cable operators is the medium's lack of diversified programming. In its early years, cable television seemed to promise a new era of “narrowcasting,” featuring a wide choice of programs, each tailored for narrow sections of the viewing public. Instead, most cable programming emulates network fare: news, sports, variety shows and movies.