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Cable Technology Feature Article

December 10, 2012

New Cracks in Video Subscription Business?

By Gary Kim, Contributing Editor

One might argue that people are watching less cable TV because cable TV subscribers are in a long-term decline. On the other hand, online viewing also seems to be showing some seasonality.

On the other hand, should current trends continue, and ratings continue to decline, advertising revenue for cable programming networks is likely to decline in rough tandem. In 2011, cable ad revenue growth, which had been outpacing advertising growth rates overall, began to track overall ad spending. 

That bit of evidence might suggest that the demand continues to shift to online sources, even if it sometimes seems a glacial pace. In other words, cable network ratings are falling because, even when people have subscriptions, they simply are watching less subscription video overall.

That might lead you to question whether a typical video entertainment subscription really can sell for $200 a month, as some predict will be the case by 2020.

And pressure seems likely to increase. Facebook, for example, seems set to step up its efforts to monetize the amount of video viewing on Facebook (News - Alert), which has been likened to “three Super Bowls worth of viewing, every day.”

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Edited by Brooke Neuman

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