In the second quarter of this year customer take-up of cable television services hit its lowest ever quarter on quarter growth rate of just 1.9%. Between April and July, only 55,157 new homes subscribed to cable TV, according to the latest figures from the Independent Television Commission. At the same time investment in the construction of cable slowed to an all time low, with just 26,000 new homes being set up by the cable companies to receive TV and telephony services.
Increasing competition in the multi-channel television market and the cable companies’ relatively slow development of digital services have both contributed to the slow-down of cable TV take-up. The launch in the last twelve months of digital television services has impacted heavily on cable’s growth. While the cable industry has been concentrating on its gradual consolidation – there are now only two major companies, NTL/Cable & Wireless and Telewest – BSkyB and ONdigital have both thrown millions of pounds behind heavyweight ad campaigns for their digital TV services.
As a result, those people who recently decided to convert from terrestrial to multi-channel television have plumped for the free set-top box offers of Sky Digital and ONdigital. A recent study by media research group .ECON, commissioned for the BBC, found that interest in multi-channel television is likely to be limited to around 55% of households. As this plateau is reached all multi-channel platforms are liable to find it more and more difficult to add new customers. At present, just over 30% of UK homes receive a multi-channel TV service, be it BSkyB, ONdigital or cable.
Cable & Wireless Communications is about to embark on its TV, press and poster advertising campaign in which it will stress that CWC digital is not just about more channels, but also features TV internet access, email and interactive shopping services. This comes as rival digital terrestrial operator, ONdigital, yesterday announced a 66% increase in customers since June, to 411,000.
Meanwhile, Telewest Communications has yet to launch its digital television service, which is currently scheduled for the last quarter of 1999. Rival NTL, which is in the process of merging with Cable & Wireless (see NTL Spends £8.2bn On Cable & Wireless Communications), has indefinitely delayed the launch of its digital service after missing two self-imposed deadlines.
