Look for the FCC's latest video competition report -- its
15th -- to be short on conclusions and long on data points illustrating
that alternative providers and distribution models are making inroads on
traditional delivery, but that those traditional video providers remain the
According to an FCC source with knowledge of the report,
which is being released Friday by the Media Bureau at the FCC's July open
meeting, the data suggests that while traditional markets are still strong,
things are beginning to change.
The report does not draw any conclusions about whether or
not the market is competitive, according to multiple sources. Instead, it
basically lays out data and input from others on that data, then says that at
this moment, everybody is largely "sitting pretty" where they are,
but they are feeling the hot breath of new competitors like cord-cutters and
others moving away from traditional models.
The report's data points include Nielsen data showing that
the average American in a week will consume 34 hours and seven minutes of
traditional television, two hours and 40 minutes of time-shifted viewing, 40
minutes of Internet video and 10 minutes of smartphone viewing.
The report will also include figures that show that revenues
are going up for broadcasters, with a good sized bump projected for 2012, and are
still going up for cable operators and programmers, but that, at the margins as
programming costs go up as well, cable MVPDs are losing subs.
The report notes that cable subscribership was at 57.4% in
2011 down to 55.7% in June 2012. By contrast, DBS is going the other way, at
least slightly, from 33.9 million in 2011 to 34 million in 2012.
At the same time, there has been some slight concentration
in the cable marketplace. Another report data point is that at the end of 2010
the top 10 cable operators represented 89.1% of subs, now its 90.4%.
The top five used to represent 80.1%; now it's 80.7%.
On the broadcast side, the report also talks about
consolidation, but only mentions in passing the latest "super group"
deals since they have not closed yet. The report talks about how many TV
stations were bought and sold as of, at the latest, mid-2012, but does not
analyze the deals.
Online video distributors are probably the fastest growing
segment in terms of new subscribers -- from 26.6 million households to 41.6
million as of June 2012.
The report doesn't draw conclusions about how competitive
the market is, but it does base its competitive analysis on the assumption
that, as of 2011, 100% of households have at least two MVPDs thanks to Dish and
DirecTV, and that 98.6% have access to at least three competitors when
cable/telcos are added in.
The FCC has been putting its money where that
competitive test is, routinely granting cable requests for effective
competition determinations -- deregulation of basic rates -- based on the
presence and subscriber uptake benchmarks of Dish and DirecTV.