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PwC Sees Modest Station, Cable Growth

Growth in the distribution side of the U.S. TV business should grow modestly over the next four years, with TV stations increasing revenues an average of 4% annually, and cable, satellite TV and telephone companies boosting video sales at the rate of 6%.

That’s the conclusion of PricewaterhouseCoopers’ annual media forecast, to be released at a firm conference Wednesday in New York. The forecast expects cable and DBS revenues to grow from $69.1 billion this year to $86.6 billion in 2010.

At the same time, TV stations should increase sales from $32.5 billion to $37.2 billion.

The study includes an exceptionally aggressive forecast for telephone companies’ entry into video. PwC estimates that telephone companies will snag 10 million video subscribers by 2010, excluding any subscribers secured through marketing relationships with DBS operators. That’s quadruple the growth seen by other studies, including, for example, one by UBS Securities.

Further, the study estimates that cable will be damaged far more than DBS as telcos roll out video service, predicting that cable systems will drop from 68.8 million subscribers at the end of last year to 62.8 million, down an average of 1.8% yearly. DBS, by contrast, is seen as continuing to grow an average of 4.6% anually, from 26 million subscribers to 32.5 million.

"We’re expecting some robust effort on the part of the telcos," says Stefanie Kane, a partner in PwC’s media practice. She added that cable operators should be able to maintain revenue growth by increasing prices and adding new services.