Residential cable revenue to jump from $68 billion to $120 billion

Cable TV residential revenue—forecast to be $68.2 billion in 2006—will hit $120 billion by 2016, according to Kagan Research newsletter Cable TV Investor: Deals & Finance estimates. That doesn't include additional revenue from business customers. The gains are expected despite penetration for cable TV video services as a percentage of all residential TV households slipping slightly from 58.6% this year.

Buoyed by the growing service menu, average revenue per cable subscriber including all services is expected to climb from $87.04 per month in 2006 to well over $140 by 2016. Cable TV's local advertising—a component of ARPU—is fast growing. Kagan forecasts net local cable ad billings will increase from nearly $4 billion this year to $9.6 billion by 2015.

Kagan Research believes cable is piling on new revenue streams that will keep it a healthy growth business. Cable telephony and high-speed cable modems get the most attention among add-on cable services. But the list is much longer: digital video recorders, high definition channels, video on demand and interactive TV. Cable faces competition from satellite TV and the telcos. 

Related: The commercial services segment for the U.S. cable industry is expected to approach $14 billion in annual revenue by 2015

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