High-Definition Is Changing the Multiplatform Marketplace

Implications: 1. DIRECTV is the key factor in stimulating the HD market.    2.  For the MSOs and Telcos, Time Warner leads in terms of High-Definition feeds with 56 HD channels in the New York

Analysis:  It was not long ago that analysts, cable operators, satellite providers and a number of regulators scoffed at the telephone companies’ plans to penetrate the progressively more crowded multiplatform market place.  Currently, FiOS and U-verse franchises are positioned in 22 states with additional franchises created every month.  For the first two quarters of 2008, Verizon and AT&T collectively announced additional land-based video services in more than 200 communities.

In addition, it is almost impossible to talk to anyone in the multiplatform industry without discussing some tough points regarding high-definition delivery. Who has HD… Who doesn’t?  What is the resolution / video quality?  How many channels?  Where?  

DIRECTV is currently the market leader in high definition delivery with 97 HD channels nationwide followed by 67 Dish HD channels.  For the MSOs and Telcos, Time Warner currently leads with 56 HD channels in the New York and San Antonio.  Verizon FiOS and AT&T U-Verse are tied for second with 54 HD networks in Fort Wayne, Indiana and New York respectively.  Cox has 51 HD feeds in Los Angeles, Cablevision has 50 HD feeds in Philadelphia, Comcast is next in line with 46 Feeds in New York followed by Charter with 44 HD channels in New Orleans.

One of the challenges the cable companies face in growing their HD offerings is how to manage bandwidth appropriately. There is a limit to how quickly the cable companies can switch to all digital or upgrade to switched digital to expand their HD offering. Today, approximately one out of five basic cable/satellite customers have HD.  Now that one third of the American TV households have at least one HD television, it is expected that that number of multiplatform subscribers paying for HD delivery will grow to better than three in five by 2012.