Wired Cable Alternatives Skyrocketing

28.4% OF AMERICAN TV HOUSEHOLDS NOW SUBSCRIBE TO ALTERNATE DELIVERY, AN ALL-TIME HIGH;
WIRED CABLE PENETRATION HITS 18-YEAR LOW

Backgrounder on ADS ADS and cable penetration history in your DMA National ADS and cable penetration history PowerPoint for use with local advertisers

NEW YORK, Aug. 13, 2008 -- More American TV households are receiving video programming via an alternate delivery system (ADS) than ever before while wired cable’s penetration percentage hit an 18-year low, according to a TVB analysis of Nielsen Media Research data for July 2008.

According to Nielsen NTI data, national ADS penetration reached 28.4% of television households in July, an all-time high that is up from 27.5% in July 2007, and now represents 32.1% of subscription television customers (those paying for video delivery), another all-time high. Over the same period, national wired-cable penetration of television households fell from 61.1% to 60.9%—the last time wired cable was lower was in February 1990.

Direct broadcast satellite (DBS) delivery, the largest component of ADS, is now estimated at 28.2%, up from 27.0% in July 2007.

“Advertisers who buy cable locally need to know that local wired cable systems’ ability to deliver commercials continues to erode. In 19 markets, a majority of those paying for video programming are now getting that programming via ADS rather than from a wired-cable system. And 59 markets now have ADS penetration of 40% or more,” said Susan Cuccinello, Senior Vice President, Research, TVB. “Local cable commercials are not seen in ADS homes, and so local advertisers need to deduct the ADS percentage of the audience if they are included in the cable systems’ submissions.” In November 2003 Nielsen Media Research began making available hard-wired local cable numbers and excluding ADS homes via its Total Viewing Sources DVD. But some third-party processors are still adjusting their software products to use the new DVD and the printed Nielsen books do not break out the numbers separately, so advertisers will need to make ADS deductions manually for some time.

Below are the leading markets for ADS penetration in the top 50 DMAs, DMAs ranked 51-100, and DMAs 101 and higher, according to July 2008 Nielsen Media Research/NSI data:

Source: Nielsen Media Research/NSI, July 2008