Satellite TV Providers in the US Industry Market Research Report Now Available from IBISWorld

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The introduction of high-definition TV vastly improved the quality of shows and attracted subscribers even as disposable income dropped during the recession; over the next five years, the industry will face escalating competition from other media, resulting in companies using aggressive marketing tactics that are expected to cut slightly into industry profit. For this reason, industry research firm IBISWorld has updated its report on the Satellite TV Providers industry.

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Profit margins will tighten as operators boost marketing to retain subscribers

The Satellite TV Providers industry has posted solid growth over the past five years, supplying a variety of programming to a broadening subscriber base willing to pay a premium for in-home entertainment. According to IBISWorld industry analyst Kevin Boyland, new networks, more channel offerings and bonus features have continued to strengthen the industry's appeal to consumers, even as disposable income dropped during the recession. For example, the introduction of high-definition (HD) TV not only vastly improved the quality of programming, but also attracted new subscribers to higher-margin programming packages. Higher spending on industry services is anticipated to result in annualized revenue growth rate of 4.5% over the five years to 2013. In 2013 alone, revenue is expected to increase 1.8% to $39.8 billion as more consumers subscribe to satellite TV.

High initial fixed costs, which major players have largely already paid off, are a defining aspect of this industry. Progressive technologies, such as new data compression formats, have advanced the quality and speed of direct broadcast satellite (DBS) transmissions, increasing the medium's marketability, continues Boyland. With satellites already in orbit, the industry's two main players, DirecTV and Dish Network, only incur low costs per additional subscriber. However, as internal and external competition heat up, providers may be unable to pass on increasing programming costs to customers, which may dampen profit growth. Similarly, amid heightened competition throughout the broadcast distribution sector, the cost of acquiring and maintaining subscribers has increased, pressuring profit growth. The Satellite TV Providers industry has a high level of concentration. Over the past five years, the top companies have successfully expanded their scope and revenue by offering an increasing array of services and continually improving their quality. These two major satellite providers feature about 200 HD channels and various on-demand services, such as digital video recorder (DVR). This industry is highly concentrated because larger corporations are better equipped financially to develop, launch and maintain satellites.

Due to high start-up costs, regulation and intense competition, few small producers have managed to develop a niche market. Such companies typically vie for specific target audiences, such as religious or immigrant viewer groups, by providing channels specific to their audiences' interests or culture. These smaller players are able to survive in the industry, but do not compete directly with its major players. Consequently, IBISWorld expects industry concentration to remain high over the next five years. Over the next five years, the industry will face escalating competition from other media. Therefore, more aggressive marketing tactics are expected to cut slightly into industry profit. However, the ability of major players to continue developing ways to retain and attract subscribers will determine industry revenue growth. Although still a developing trend, selling advertising space via online content offered to subscribers on an on-demand basis has the potential to provide a new revenue stream to satellite TV providers moving forward. For more information, visit IBISWorld’s Satellite TV Providers in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in this industry distribute TV programs on a subscription or fee basis through infrastructure consisting of direct broadcast satellites (DBSs). The industry also includes multipoint distribution system operators that deliver wireless TV programming using ground stations. These companies operate in rural areas and have a negligible effect on industry performance. This industry excludes TV networks and other satellite telecommunications providers.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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