Tuesday, February 06, 2007
Conventional wisdom holds that since television programming is really just data and the electromagnetic waves that the satellite TV industry uses to transmit its programming have a much higher bandwidth than any cable, satellite TV should be able to deliver more channels to its customers more easily and more cost effectively than cable TV. Cost effective is the operative term hear. Ultimately, no matter how much data you can cram onto those electromagnetic waves, all of it has to pass through a cable at some point in the transmission process. That means that even if a satellite provider could send thousands of channels using an electromagnetic signal, all of the data that comprises those channels would still have to pass through a cable in order to get from the satellite dish to the receiver box. Of course, no one is going to send thousands of channels, at least not in the near future, but the point is that the cable TV and satellite TV industries are really subject to a lot of the same technological constraints.
The main difference between the two types of technology is in scale, and what the differing scales will cost. For example, if the satellite TV industry suddenly sees fit to radically increase its its program offerings, it has to launch a few more satellites and upgrade a few yards of cable running from each user's satellite dish to their receiver unit. The receiver unit itself would probably have to be replaced too.
If the cable TV industry decided to radically increase its program offerings (which it's had to do just to keep up with what the satellite TV providers are doing) it will have to replace its customers' receiver units just like the satellite TV industry, but instead of a few yards of cable per customer, it will have to replace thousands or even millions of miles of cable. Add that to the fact that the cables are all underground and the upgrades can only be done at considerable trouble and expense.
Of course launching satellites isn't cheap either, but that expense can be shared among the millions of subscribers that the satellite TV companies have. Most cable companies don't have anywhere near as many subscribers. Also, because the satellite signals can be picked up virtually anywhere in North America, the satellite TV companies can see a much greater return on the investment of launching a satellite or two as more people sign up and are served by those satellites.
More recently, however new technology has been developed that will allow the cable companies to convert all of their programming to digital format. This will allow them to offer the same amount of programming in a smaller bandwidth so they can use the remaining bandwidth to add more channels, especially more HDTV. Of course the satellite TV providers are striking back with plans to launch more satellites so they can offer more HDTV channels.
In the end, as the two industries come to resemble each other more and more in the types of programming and number of channels they offer, the one that comes out on top will be determined by price.