Cable poised for explosive revenue growth

The cable industry is poised to dramatically increase its average revenue per customer, using today’s digital cable platforms, according to a new report from Kagan Research.

By capitalizing on high-growth businesses made capable by its digital platform, cable TV companies will grow their ARPU from $72.89 a month last year to $143.15 a month over the next 10 years, said Kagan Research analyst Renee Shaening. And those increases will come in the face of competition from the telcos in video services, she added.

Interactive TV, video-on-demand, IP voice and local cable advertising all contribute to the increased revenues and are possible on today’s infrastructure, she said. Revenue from those services will increase from $233 million in 2004 to $6.4 billion by 2015, according to the report, which is featured in the Kagan Research newsletter, Cable TV Investor: Deals & Finance.

Kagan forecasts revenue from voice service to increase from $1.7 billion to $11.8 billion or about $13.88 per subscriber per month by 2015. Local advertising is projected to increase from $4.47 a month to $13.38. While competition is likely to affect pricing of service bundles, Shaening believes the major players will avoid a price war.

“Nobody wants an all-out price war because it wouldn't be beneficial to anyone,” she said in a statement releasing the report results.