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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Timothy R. West who wrote (34319)	7/15/1998 5:11:00 PM
From: John Rieman	Respond to of 50808

Cable needs to act quickly on Digital Video services, or loose customers........................................ newsalert.com Analysts Warn of Cable Industry Losses as American Consumers Go Digital Business Wire - July 15, 1998 08:21 BURLINGTON, Mass.--(BUSINESS WIRE)--July 15, 1998--New research from technology analyst group Ovum, carries a stark warning to the US cable industry. Analysts predict a sharp decline in the number of cable subscribers across America as consumers adopt new digital satellite and digital terrestrial services. The cable industries will suffer major losses unless they are able to respond early to this new competitive threat. The findings, available from Ovum in a new report, Digital Television: How To survive and Make Money, include strategic guidance, scenarios and market forecasts. According to John Moroney, a principal consultant in Ovum's new media group, "The cable companies now face a new competitive challenge in which both satellite and terrestrial broadcasters are able to offer viewers as many high quality channels as cable service providers. In addition, cable companies and telcos are aligning themselves for a head to head battle to win over consumers." Ovum points out that at the heart of this confrontation is the belief that, in order to remain competitive in the mass market, communications corporations will need to offer a full range of services, including video on demand, voice telephony, and high-speed Internet access. Many of the main telcos and cable corporations have run trials of these services. The results indicate a very weak case that will not justify the high cost of investment. Moroney continues, "Over the next ten years, consumers will buy digital televisions that are tailored for broadcast interactive services. This means that telcos and cable companies need to radically re-think their business strategies. Digital broadcasting will seriously threaten the development of interactive cable services." Ovum's research shows that both digital satellite and digital terrestrial will affect cable services and lead to a decline in the number of subscribers. Cable TV penetration in the US is currently at 65%. Entertainment and information will be the most significant revenue streams, followed by marketing and advertising. "The cable industry will be particularly at risk in multi-occupant housing where the owners of the property also own the internal cable infrastructure," explains Moroney. "Owners will see digital terrestrial and satellite as a cheap way of providing multi-channel programs. "To prevent market decline, Ovum advises the cable industry to introduce digital cable technology, as well as offer new programming material that is significantly better than the material broadcast free to air by terrestrial broadcasters. But it is doubtful whether the cable industry currently has the core capabilities needed to make these adjustments. "To remain profitable, the US cable industries must give serious consideration to restructuring and to focus on core activities," concludes Moroney.