Area's growth proves difficult for cable TV to keep up with, making DFW a fertile ground for satellite
By Bobby White
Star-Telegram Staff Writer
The Metroplex remains a difficult region for cable television operators to penetrate but is fertile ground for satellite companies, according to a new study.
An estimated 47.6 percent of Dallas-Fort Worth households have cable, ranking the region 74th out of 75 markets in the country that the Austin-based Scarborough Research examined in its report. Nationally, 66.7 percent of households have cable.
Conversely, 30.3 percent of Dallas-Fort Worth households have satellite, ranking the region second in that category, Scarborough said. Nationally, 18.4 percent of households have satellite.
The figures -- particularly those for cable -- weren't surprising to regional experts. North Texas has a broad array of broadcast choices, its population growth has outpaced cable companies' ability to expand here, and increases in cable rates have pushed some customers away.
"I expect to see more erosion of the cable numbers," said Alan Albarran, professor and chairman of the University of North Texas Department of Radio, TV and Film.
"Of course there will be some jockeying back and forth, in an industry such as this you are going to always have churn, but satellite will do well," he said.
Blake Cummings, government relations manager for Charter Communications in Fort Worth, said a big reason for low cable penetration in North Texas can be found in increased home construction.
"I do a lot of work with city officials," Cummings said. "We have such growth here that it strains our resources to keep up. I've talked to city officials
said it's even tough for city water and sewer to keep up."Cummings said unless Charter, which serves Fort Worth and several other cities in Tarrant County, is available when new subdivisions are being built, then satellite becomes a very easy choice for consumers.
In the past, he has set up meetings with city officials to coordinate efforts with cable providers.
"Satellite is a tough competitor," he said.
Regional experts said low cable penetration in North Texas has been a fact of life since the now-defunct Sammons Communications had a significant regional presence in the 1980s.
When Scarborough measured the four-county Fort Worth-Arlington market by itself, only 42.6 percent of households had cable.
"This market has been historically terrible in terms of cable penetration, which outdates the Dish Network or [parent company] EchoStar," Albarran said.
Albarran, who also serves as editor of the Journal of Media Economics, said the nation as a whole is going through a tremendous shift, from broadcast television to its pay substitutes -- cable or satellite. Telephone companies are even beginning to vie for a piece of the TV market by bringing fiber-optics into homes.
Albarran said the Metroplex -- a 32-county market in the Scarborough study -- has been a region known for its rich broadcast television choices, with a multitude of channels, enough to satisfy an anti-cable consumer.
Satellite penetration levels began to pick up after Congress called for satellite to offer local stations through its service, Albarran said. The legislation went into effect in 1999.
Both EchoStar and DirecTV -- the two largest satellite providers -- reported strong growth for the first quarter of 2004. DirecTV attracted 460,000 new subscribers nationally, bringing its customer base to 12.6 million. EchoStar reported 360,000 new subscribers nationally, bringing its total to 9.8 million.
In contrast, Charter, the nation's third-largest cable company with 6.1 million subscribers, added 68,800 video subscribers systemwide. Philadelphia-based Comcast Corp. added 227,000 digital and basic subscribers for the first quarter. Comcast has 21.5 million cable subscribers systemwide; it serves Arlington and much of Northeast Tarrant County.
The competition between cable and satellite is ferocious, with both sides running ads that take shots at their rivals. DirecTV even sponsors www.stopfeedingthepig.com, a Web site dedicated to chastising the cable industry.
Marc Lumpkin, a DirecTV spokesman, says it's easy to understand why satellite has grown in popularity.
"We have fewer and lower rate increases than cable," Lumpkin said. "We also increased our distribution points. A year ago, we signed up RadioShack to sell the service. They are one of our most successful vendors."
Cable companies have fought back. Charter has aggressively pushed its digital recording devices and broadband Internet, an offering that satellite has been unable to successfully counter.
And to counter satellite companies that have partnered with Internet providers to offer bundled services, Comcast announced two weeks ago that it would offer Internet phone service to 40 million customers by 2006.
"Comcast faces competition in all areas of our business," said Angel Biasatti, a Comcast spokeswoman."Which is why we work to make Comcast as easy and convenient to do business with as possible."
Satellite vs. cable
Top 10 cities for satellite penetration
Rank City * Satellite penetration percentage * Cable penetration percentage * Rank of cable penetration
1 Salt Lake City * 30.8 * 45.6 * 75
2 Dallas/Fort Worth * 30.3 * 47.6 * 74
3 Nashville, Tenn. * 28.4 * 60.0 * 57
4 Roanoke/Lynchburg, Va. * 27.7 * 59.1 * 58
5 Albuquerque/Santa Fe, N.M. * 27.7 * 49.6 * 73
6 Lexington, Ky. * 27.4 * 60.9 * 55
7 Spokane, Wash. * 27.2 * 53.0 * 71
8 Charleston/Huntington, S.C. * 27.1 * 66.1 * 36
9 Raleigh/Durham, N.C. * 26.7 * 61.5 * 53
10 St. Louis * 26.7 * 53.8 * 70
Top 10 cities for cable penetration
Rank City * Cable penetration percentage * Satellite penetration percentage * Rank of satellite penetration
1 Hartford/New Haven, Conn. * 85.6 * 6.5 * 74
2 Honolulu * 83.1 * 4.8 * 75
3 Boston * 80.9 * 9.4 * 71
4 Philadelphia * 79.1 * 8.9 * 73
5 Providence, R.I./New Bedford, Mass. * 78.7 * 10.0 * 70
6 San Diego * 78.2 * 9.3 * 72
7 New York * 76.5 * 12.5 * 65
8 Harrisburg/Lancaster/Lebanon, Pa.* 76.3 * 11.7 * 68
9 Pittsburgh * 76.3 * 13.2 * 62
10 West Palm Beach/Fort Pierce, Fla. * 76.3 * 18.9 * 61
Source: Scarborough Research
