US Satellite-TV Cheaper than Cable For First Time

21 August 2003

Americans for the first time pay less for satellite television than they do for its cable counterpart.

A new study from J D Power & Associates found the average monthly bill for cable TV totals $49.62 (€44.63; £31.12), up 41% since 1998. Over the same period, satellite bills have risen just 8% to an average of $48.93.

Moreover, the survey – based on responses from 7,340 households across the US – found that satellite subscribers are happier with what they get. When asked to rate their operators on reliability, cost, billing, image, customer service and promotions, subscribers of Hughes’ DirecTV and EchoStar’s Dish Network (the nation’s two satellite platforms) awarded higher marks than cable customers.

Satellite has been steadily eroding its rival’s dominance in recent years. J D Power found that cable now serves 60% of households, down from 68% in 1998, while satellite’s share has risen from 7% to 17%.

But there is some good news for cable firms: evidence that customers are willing to pay more for extra services.

Cable operators have invested heavily in technology such as digital TV, broadband internet and video-on-demand – indeed, the cost of upgrading their networks has been a major factor in pushing up subscription fees. J D Power believes cable firms can defend themselves from satellite rivals by offering ‘bundled’ subscriptions – an assertion backed up by the survey, which found that 38% of cable customers want to take up extra services on top of cable-TV.

Data sourced from: multiple sources; additional content by WARC staff