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INDUSTRY SEGMENT PERFORMANCE

08/02/00

Cable's prime-time audience share grew by 3.0 percentage points to 48.0% in 1999, with a 41.0 share from basic cable programming and a 7.0 share from pay cable programs.
Since 1995, the cable industry's annual growth has surpassed that of the nation's economy, and in 1999 total spending on cable & satellite television reached $56.8 billion, an 11.9% increase over the prior year. Veronis Suhler projects spending to reach $86.4 billion in 2004, a CAGR of 8.8% for the forecast period. This compares to a CAGR of 13.1% from 1994 to 1999.

Spending on basic services totaled $27.5 billion in 1999, up 9.1% for the year and posting a CAGR of 11.6% since 1994. Veronis Suhler expects spending to grow to $40.0 billion in 2004, a 7.8% CAGR. In addition, the healthy economy of the past several years has given subscribers more financial freedom to choose add-on cable services and special programming options. For example, pay-per-view expanded at a CAGR of 29.8% from 1994 to 1999.

Spending on premium services reached $7.4 billion in 1999, with $5 billion spent by cable subscribers and the remaining $2.4 billion by satellite subscribers. DBS continues to experience significant growth, adding 2.6 million new households in 1999. Subscriptions were up 35.2% in 1999 compared with 40.8% in 1998.
Source: Veronis Suhler Communications Industry Forecast

11/09/99

The number of subscriptions to video services increased by 5.9 percent in 1998, reaching 78.3 million from 73.9 million in 1997.
The subscription video services operator market consists of cable, direct broadcast satellite (DBS), multipoint multichannel distribution service (MMDS) or wireless cable, C-band satellite, satellite master antenna TV (SMATV), and services provided by local telephone companies.

Accounting for 83.5 percent of subscriptions to video services, cable is still responsible for a significant share of the industry's growth. In 1998, there were 65.4 million households subscribing to cable service. In spite of heightened competition from DBS, which has characterized the industry for the past four years, the cable universe has continued to grow, adding net 1.2 million households in 1998. By comparison, DBS subscriptions expanded by a net 2.2 million households.

Subscription video services spending will grow at a projected 11.3 percent compound annual rate over the 1998-2003 period, comparable to the 11.6 percent annual growth of the last five years.
Source: Veronis Suhler Communications Industry Forecast

1/04/99

Revenues of publicly reporting subscription video services companies rose 17.7% to $34.4 billion in 1997, the third consecutive year of double-digit growth.
SVS operators accounted for $27.9 billion of the total, while cable and pay-per-view networks accounted for $6.4 billion. Assets rose 11.6% in 1997 to $114.3 billion, more than twice the $49.3 billion total of 1993.

Operating margins rebounded in 1997, after declining between 1993-1996. Operating income rose .5 points to 9.4%, while operating cash flow rose 1.7 points to 36.6%.

Growth for cable operators was mainly generated by existing subscribers' increased spending on a greater array of basic, premium, and pay-per-view offerings. In 1997, cable operators reaped the benefits of earlier system upgrades which allowed them to expand channel offerings.

DBS subscribership increased by 2.1 million in 1997, three times cable's gain, and revenues for DBS operators rose 83.0% to $2.8 billion -- more than 10 times 1993's total.

For basic cable networks, the higher subscribership count boosted license fees while ratings and advertising continued to soar. Revenues of publicly reporting cable network companies rose by 12.9% in 1997, the fourth consecutive double-digit increase.
Source:Veronis Suhler Stevenson Communications Industry Report



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