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US satellite TV market led by DirecTV and Dish Network

Industry Sector

Telecommunications

Published

24 January 2013

Author

Alex De Angelis

Type of News

Market

The United States satellite TV market has posted solid growth over the past five years, supplying a variety of programming to a broadening subscriber base willing to pay for in-home entertainment.

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.

As a result, the revenue growth rate was 5.6% over the five years leading up to 2012, and by the end of 2012 revenues within the US satellite TV market had increased 3.8% to hit a value of $41.4 billion.

Satellite television is television programming delivered by the means of communications satellite and received by an outdoor antenna, usually a parabolic reflector generally referred to as a satellite dish, and as far as household usage is concerned, a satellite receiver either in the form of an external set-top box or a satellite tuner module built into a TV set.US satellite TV

Currently, there are two primary satellite television providers of subscription based service available to United States consumers: DirecTV and Dish Network. Over the past three decades, various U.S. satellite services have come and gone or combined to form the current primary services.

High initial fixed costs, which major players have largely already paid off, are a defining aspect of this industry. While they are often prohibitive to industry start-ups, they also indicate industry backers' high confidence in the success of industry firms.

With satellites already in orbit, existing companies, like DirecTV and Dish Network, only incur low costs per additional subscriber. By keeping other costs stable, the industry is expected to have earned a healthy profit of approximately 16% of revenue (earnings before interest and taxes) in 2012.

Over the next five years, the US satellite industry will face escalating competition from other media. Therefore, more aggressive marketing tactics are expected to cut slightly into profits.

For more information on the US satellite TV market, see the latest research: US Satellite TV Market

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