Worldwide Cable TV Industry Manages to Grow in 2003, But Challenges Abound Says In-Stat/MDR.

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Jan. 21, 2004

Although the total number of worldwide cable TV subscribers increased last year, the rate of growth in 2003 was the slowest in over a decade. However, even with the recent slow-down in worldwide growth, total cable TV subscribers are projected to reach 395 million by 2007. According to In-Stat/MDR (http://www.instat.com), cable TV subscriber growth will result from not only cable television operators' ability to attract new subscribers to their traditional analog video services, but also from recently deployed digital video, voice, and data services. The high-tech market research also reports that while annual cable TV subscriber growth was tracking around 3% in 2003, digital cable TV subscriber growth reached 22% during the same time frame.

Even with rapid digital subscriber growth, the modest total subscriber growth rate is forcing many cable TV operators to re-focus their customer acquisition strategies. "Cable television growth in North America and Europe has dramatically flattened over the past two to three years, and this has been an unwelcome trend for many cable TV Multiple Systems Operators (MSOs) who have been counting on new subscribers to increase their revenues," said Mike Paxton, a senior analyst with In-Stat/MDR.

While some recent subscriber losses have come from regional economic recessions, long-term cable TV subscriber growth is increasingly threatened by DTH satellite services. However, according to Paxton, "The good news for cable operators is that the digital revolution is bringing both new services to cable customers and new sources of revenue to cable operators." These digital cable offerings cover services such as: expanded channel lineups, Video-on-Demand, High Definition TV services, and high-speed data services. A key challenge for cable operators is that the cost to upgrade cable plants in order to provide these digital transmissions is substantial. This high cost, in turn, has slowed the overall pace of digital upgrades and has limited digital cable TV service to a few of the wealthier countries in the world.

In-Stat/MDR has also found that:

-- The top four countries in terms of total cable TV subscribers

remain China, the United States, India and Germany.

-- Over the past three years, the majority of worldwide cable TV

subscriber growth has come from Asia, with the countries of

China and India accounting for up to 60% of all annual

subscriber additions.

-- The North American cable TV market actually shrank a little in

2003, as several hundred thousand former cable subscribers

either switched to satellite services or simply "pulled the

plug" on cable. However, the North American market remains the

seat of innovation for digital cable services. During 2003,

digital cable TV subscribers in North America increased by

20%.

The report, "Digital Cable TV Subscribers: North American Demand Amplifies Growth" (#IN030712MB), examines the composition and disposition of worldwide cable television subscribers. It provides In-Stat/MDR's annual look at basic and digital cable TV subscribers on a country-by-country basis, and updates the status of both existing and planned digital cable TV services. In addition, the report provides worldwide forecasts for both basic cable TV subscribers and digital cable TV subscribers through 2007, and identifies the top 12 largest cable operators in each geographic region. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/Ccatalogue.asp?id=39 or contact Erin McKeighan; [e-mail] or 480-609-4551. The report is priced at $2,195.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With more than 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.