Although the FTA networks, such as ABC, CBS, and NBC all offer digital and increasingly High Definition TV programming, for many years they have been losing audience share to the cable and satellite TV networks. The Big Three are expected to continue to lose market share to the DBS and cable providers as well as, incrementally, to the telcos' IPTV networks. The US now has one of the highest rates of pay TV penetration in the world. By 2010 there were over 100 million pay TV (or Multichannel Video Programming Distributors) subscribers in the US, amounting to over 85% of households. A significant trend in the digital TV market is the shift towards video-on-demand and other forms of online video viewing, a trend which will continue to strengthen along with the growth of broadband networks, according to a new research report by Research and Markets entitled "USA- Digital TV Market-Broadcasting and IPTV."
In the 1950s to 1970s three large privately-owned networks, ABC, CBS and NBC, claimed 90% of the US TV market with free broadcasts. The rapid spread of pay TV over cable in the 1980s broke the hegemony of the big three and by 2001 around 70% of US TV households subscribed to cable TV (CATV).
During the early 1990s Digital TV (DTV) was available via Digital Terrestrial Television (DTTV) through antenna, via digital cable and via digital satellite. In the late 1990s other delivery technologies became available, such as Digital Multimedia Broadcasting (DMB) using digital radio transmission to allow handheld devices such as mobile phones to receive TV signals, as well as network infrastructures that deliver TV over Internet Protocol (IPTV).
In particular, while the telecom sector fought the unbundling provisions of the 1996 Telecommunications Act, the CATV companies capitalised on this opportunity by digitalising their cable infrastructure, with the result that by 2006 approximately 99% of US households were passed by digital cable. By end-2009 around 87% (or just over 99 million) of US households subscribed to some form of Multichannel Video Programming Distributors (MVPD) service, predominantly cable (62% of households) and satellite TV (33% of households).
Initially, the introduction of DTV did not affect the competitive landscape in the USA with the national Free-to-Air (FTA) networks and content providers remaining as the dominant players. Acquisitions and mergers affected consumer choice more than new technologies. However, since 2000 digital technology has gradually brought about the convergence of telecommunications, broadcasting and content services, causing the market to substantially transform.
For instance, in 2000 the CATV companies launched broadband access services over their digital cable infrastructure and by end-2004 had captured around 60% of broadband subscribers. Another significant change took place in 2004/05, when the dominant cable companies began to build out digital voice telephony or Voice over Internet Protocol (VoIP) infrastructure across their footprints, enabling them to offer triple play communication services - voice, broadband Internet and DTV content - over the same cable pipeline into the home. This placed them as direct competitors to the telcos.
The powerful telcos, Verizon, SBC, BellSouth and Qwest, responded by entering the broadcasting market initially through partnerships with satellite Direct Broadcasting Service (DBS) broadcasters, bundling satellite TV with the telcos' voice and Digital Subscriber Line (DSL) broadband. The long-term telco strategy is to build fibre deep into their networks, enabling them to deliver DTV over their own broadband networks.
The telcos' IPTV strategy is one of two broad models involving the use of IP to deliver TV or video services. The other model is one involving video services offering content for download or streaming over PCs and other connected devices. Although by early 2010 subscriber numbers to these two emerging IPTV models were still modest, IPTV is expected to have a profound change on the face of TV delivery over the years to 2015.
Video downloading continued to grow significantly during 2009 and is expected to rapidly increase its role in the overall video market during 2011-2015. Rapid growth in revenues will also be driven by an increase in the amount of premium content available online and the increased penetration and speeds of broadband deployment.
Another broadband access technology which is poised to make an impact on the digital TV market is WiMAX wireless broadband. Specifically, in May 2008 Sprint Nextel and Clearwire announced that they were pooling their WiMAX assets to create a new independent company which would take the Clearwire brand name. In October Sprint-Nextel and Intel officially launched their long-awaited Clear' WiMAX network in Baltimore, Maryland.
For more information on the report "USA-Digital TV Market-Broadcasting and IPTV" click here.
