Economic Impact of Cable

A recently released report reinforces the tremendous positive impact the cable industry has on the nation’s economy. The report issued by the Bortz Media & Sports Group Inc. demonstrates that not only has the cable industry continued to reinvent itself with new innovations designed to better serve its customers; the industry has reached out to attract new customers by offering a competitive alternative to traditional telephone service. Perhaps the most impressive technical achievement of the cable industry is its role as a leader in build-out of broadband in America. Since 2002, the number of cable broadband subscribers has increased three-fold from 11.6 million to 36 million in 2007.

Investing in our Future

All of these technological advances come with an incredible amount of investment. At a time when the economy has been slumping, cable has continued to step-up by creating new jobs and spurring investment. In 2007, the cable industry directly or indirectly provided 1.5 million jobs in the United States representing $62 billion in personal income. The quantifiable gross economic output associated with the cable industry is nearly $227 billion. Since 2002, nearly five percent of all new jobs created in America can be linked to the cable industry.

Of course, without programmers there would be no cable. The program network industry employs nearly 800,000 people to the tune of $30 billion in personal income and a gross economic output of $100 billion.

Building networks to deliver broadband to 36 million customers has also required a great amount of capital investment. More than $130 billion has been spent over the last ten years to build networks which far exceed the capability of many DSL offerings.

The by-product of this investment by cable industry has led to job creation in other sectors. A recent Brookings Institute study shows that for every one percent increase in broadband penetration, 300,000 new jobs are created in the United States.

Consumers now have a Choice

All of these network upgrades over the years have provided a real platform for customers to make their own decisions. By the end of 2007, 15 million Americans have chosen their cable provider to deliver their telephone service over their incumbent provider. In fact, cable has added five million telephone customers in the last year alone.

The choices don’t end there. Nearly all digital cable customers have access to thousands of video-on-demand programming titles, many of which are offered free of charge. Almost 11 million cable customers have DVR’s and 14 million have HDTV set-top boxes.

All of this investment in new technology has been met by a commitment from programmers to deliver new programming to the cable customer. In a period of just four years, the number of national basic and digital cable programming networks has grown from 308 (in 2002) to 565 (2006). The number of networks in 2006 is three times the number operating in 1997 and six times the number in operation in 1992.

In order to deliver a quality product, programmers have increased their spending and consumers are responding by watching in record numbers. In 1990, basic networks spent $1.4 billion annually on programming while last year that investment stood at nearly $18 billion.

Increased spending has translated into increased viewership and accolades. As of the 2006-07 television season, viewing of basic cable programming measured against all TV households was more than two and a half times the level of ad-supported cable network viewing during the 1994-95 season. In 2006-07, the aggregate total day viewing of ad-supported cable networks reached 51 percent, exceeding the combined viewership of all other television sources. Cable’s share in primetime was an even higher 57 percent.

The critics are also taking notice of the quality infusion in cable television programming. The number of cable programs nominated for Emmy Awards consistently rival broadcast television. In fact, the three most nominated shows in 2007 can all be found on basic or premium cable networks and nearly half of all nominated shows were cable productions.

In the Community

Many of the jobs being created by the cable operators are right here in Wisconsin. In 2007, the cable industry in Wisconsin, directly or indirectly employed more than 27,000 workers and pumped more than $4.1 billion into the local economy.

Unlike the satellite industry, cable companies paid nearly $3 billion to local municipalities in franchise fees and $1.7 billion in sales and use taxes across the nation in 2007.

In addition to being excellent community stewards by contributing to the local tax base, cable operators and program networks contributed nearly $2 billion in cash and “in-kind” contributions to national and local charities. Nationally programs such as Cable in the Classroom provide educational resources to more than 81,000 schools and right here in Wisconsin we are fortunate to have locally created, award winning community based programs such as Time Warner’s Hang Tough Video Contest and Charter’s Ribbon of Promise program.

The Bortz Media & Sports Group, Inc. study entitled “An Analysis of the Cable Industry’s Impact on the U.S. Economy,” quantifies for the general public something we have known for years, the cable industry is deeply committed to the communities it serves and is a vital cog in the economic engine of this country.

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