Cable Revenue Expected to Surge

Cable TV revenue will grow to $86.7 billion in 2008 from $33.8 billion this year as customers sign up for cable’s new services--digital programming and high-speed data and telephone service, a forecast says.

Revenue should grow at a compounded rate of about 10% a year during the next decade, with the new advanced services accounting for $32 billion, or 37%, of industry revenue, by 2008, according to a study by Paul Kagan Associates.

The dramatic gains are projected at a time when cable TV systems are increasingly viewed as the means through which U.S. homes will receive their entertainment, connect to the Internet, do electronic shopping and make calls. Most large cable companies plan to upgrade to the two-way interactive systems required for the new services.

“I can’t remember in my 35 years in the business when opportunity was better,” said Leonard Tow, chairman and chief executive of Century Communications, the ninth-largest U.S. cable company.

Revenue from advanced cable offerings such as digital television and advanced analog will grow to $10.8 billion from $1.2 billion currently, while telephone service will surge to $16.2 billion from $350 million, according to the forecast by Kagan, a Carmel market research firm specializing in the media industry. Internet and other high-speed data services will grow to $4.9 billion from $120 million currently.