Daily News Thursday, November 02, 2006
StatsCan's 2005 Cable Report
In 2005, less than 10 years after Internet services by cable were introduced, the cable television industry reached a significant milestone when it hooked up its three millionth customer.
As of August 31, 2005, the industry had 3.4 million Internet customers, up 18.9% from the previous year. The industry therefore had nearly one Internet subscriber for every two television subscribers, which was evidence of the significant restructuring completed in just a few years.
The high-speed Internet services market represented the industry's first foray into mass market telecommunications services. This allowed the industry to ensure the growth of its revenues at a time when it was losing television subscribers to its competitors.
A few cable operators added telephony to their list of available services in 2005. Together they had just over 210,000 subscribers at August 31.
Moreover, subscription revenues of $1.4 billion from non-traditional services, Internet and telephony services in particular, represented slightly more than 28% of the industry's total subscription revenues for 2005, compared to less than 8% for 2000.
These revenues shot up 15.5% in 2005, while television services generated a more modest increase of 4.6%, reaching $3.7 billion.
As of August 31, 2005, the industry had 7.6 million cable television subscribers, the same number as the year before. For the time being, it seems that the erosion of this traditional customer base that began in the early part of the decade has stopped.
While the total number of subscribers remained unchanged, digital cable television was booming. As of August 31, 2005, there were nearly 2.3 million subscribers to this service, representing an increase of 26% over the previous year. As of that date, 3 out of 10 cable television subscribers had chosen digital television.
During the same period, subscriptions to the services of wireless competitors, primarily satellite television operators, reached 2.5 million, up 7.3% from 2004. This was a turnaround after the slow down in 2004 when this segment of the industry recorded a 5.4% customer increase, representing the smallest increase from one year to the next in its history.
The industry's market share of wireless operators also increased from 23.4% in 2004 to 24.7% in 2005, and its revenues increased by 8.5% to $1.5 billion.
Both segments of the industry had higher profits in 2005 than 2004.
Before interest and taxes, cable operators earned $1.3 billion in profits or 24.9 cents in profits on every dollar of subscription in 2005, slightly higher than the 24.0 cents of the previous year.
Wireless competitors earned a much more modest income of $42.6 million before interest and taxes. This was nevertheless a turnaround for this segment after the losses before interest and taxes that it incurred every year since its inception in 1997. In 2004, its losses amounted to $92.9 million.
Competition in the subscription television market has increased somewhat with the arrival of new players over the last few years. Because of digital technology, some telephone businesses are offering television services via telephone lines. This service had attracted slightly more than 81,000 customers by August 31, 2005, all from large cities in Western Canada.