Study Finds Rapid Acceleration of Digital Cable Take-up

WESTLAKE VILLAGE, August
16: According to the J.D. Power and Associates 2006 Residential Cable/Satellite
Satisfaction Study, penetration of digital cable has increased from 30 percent
last year to 41 percent this year, thanks in part to the rollout of triple play
packages featuring digital video, data and voice services.

Currently, 29 percent of
U.S. households subscribe to satellite service alone—up 2 percent since
the 2005 study—while 58 percent of households subscribe only to cable,
down from 60 percent. An additional 1 percent of households subscribe to both
cable and satellite services, with a total of 88 percent of households with
either or both.

"Digital service is
the key for consumers in taking advantage of the aggressively marketed 'triple
play' bundle of digital video, voice and Internet services," said Steve
Kirkeby, the executive director of telecommunications and technology research
at J.D. Power and Associates. "With analog cable subscribers increasingly
converting to digital, this becomes a major advantage for cable companies in
the race against satellite providers to maintain market share."

The difference in
satisfaction scores between cable and satellite subscribers is currently 50
index points on a 1,000-point scale—down from a 69-point gap in 2005. Satisfaction
for cable and satellite providers has fallen 29 and 48 points, respectively,
since 2005.

"Recent mergers and
acquisitions within the cable industry will undoubtedly impact satisfaction in
the very near future," said Kirkeby. "During an acquisition,
subscribers are likely to be more sensitive to how their carrier is going to
impact the reliability of service and whether there will be any changes to the
price structure or payment plan.
These two areas are the most critical factors driving a customer's
intent to switch carriers."

The study also reports a
rise in DVR usage, now at 38 percent of cable subscribers and 25 percent of
satellite subscribers. Another 24 percent of cable and satellite customers
report using TiVo as their DVR.