Special Report on Cable & Satellite: The vital question of viewers: how are the numbers growing?: Are the forecasts optimistic? Jason Nisse examines the reasons for discrepancies in estimates

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Indy Lifestyle Online
IN THE year 2000 - according to various forecasts around in the market - there could be anything between 7.7 million and 11.4 million homes receiving either satellite or cable television.

It is not surprising there is such a discrepancy in the estimates - the three main organisations which measure satellite dish sales have found it pretty hard to agree what the sales are amongst themselves.

In the early days of satellite TV, most of the analysis of sales was conducted by a company called Continental Research. It contributed figures to the Financial Times Satellite Monitor, which led to some raised eyebrows as the FT is owned by Pearson, a shareholder in British Sky Broadcasting.

These figures were generally accepted to be gospel in a rather underdeveloped market, but as the market grew, other bodies came in to measure - the Broadcast Audience Research Board (BARB), the industry standard measurer of audience figures, and GfK, a rearch agency specialising in electrical goods analysis.

Soon serious discrepancies had emerged, with Continental's figures being substantially higher than BARB's and GfK's being lower still. Figures for January show graphically the differences. Contental said that total homes with satellite dishes were 2.644 million, whereas BARB had the figures at 2.297 million and GfK was down at 2.059 million. To those figures there should be added an estimated 700,000 or so households connected to either cable TV or SMATV, the community TV systems which had some early success, particularly in Scotland.

Part of the discrepancy can be explained by the fact that GfK does not include Northern Ireland, the Channel Islands or the Isle of Man, which cuts an estimated 60,000 from the GfK figures.

Allowing for that, both Phil Lewis of GfK and Bill Meredith of BARB agree that their figures are close enough for the difference to be explained by statistical sampling errors. The discrepancy between BARB and Continental is too large, however, to be a sampling error, and this has caused some concern about the Continental figures.

Continental has stopped publication of its figures for a couple of months. John Clemens, of Continental, says this is due to a change in the way figures are presented, with quarterly reviews of the market rather than monthly, though Continental will still produce monthly figures.

The discrepancies about how big the market is are as nothing to the arguments about how big it will be. These also include Continental, though the current battle is between two of Britain's largest media buying agencies, Zenith Media and Carat International.

Continental estimates that the satellite and cable market will grow strongly in the latter part of the decade - so that there will be nearly six million households with cable or satellite by 1995 and 9.5 million in the year 2000 - the equivalent of 42 per cent of the UK population. These estimates have been scaled back to take account of the slowing of sales last year, and stand in the middle ground of estimates.

The bears of the industry are Carat. In a recently published analysis, Phil Gullen of Carat Research says that cable and satellite penetration will only be 35 per cent in the year 2000 - or 7.7 million homes.

Frank Harrison, the head of research at Zenith Media, was until recently predicting that there would be 61 per cent pentration by the year 2000. He has scaled this back, but still says that 11.4 million homes will have either cable or satellite by the year 2000 - or 52 per cent of homes.

So how does this discrepancy occur? Both research agencies start from the basis of the BARB figures for current penetration. The difference is 'churn' - the number of dishes and cable connections which are cancelled by subscribers after they are connected.

Carat says that churn is nearly 20 per cent - in other words, for every five new cable or satellite subscribers, one cancels. It bases this on a survey of satellite viewers, which Carat says shows that in October 1991 there were five million cable or satellite viewers. This had risen to seven million by November 1992. Of this rise, respondents told Carat that three million of the rise was new subscriptions, and one fifth of the original viewers had got rid of their satellite dishes.

Mr Harrison says this is bunk and that there will be negligible churn. He says the Carat analysis coincided with the ending of the Sky Direct scheme which rented out dishes, and many viewers cancelled their rental agreements. He says that of those who buy, none give them back and less than 1 per cent fail to repair them if they go wrong. Of cable subscribers, there are no cancellations among those who also take advantage of the offer by some cable companies of up to 15 per cent reductions in their phone bills.

Confused? You will be.

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