FCC Releases Research Study Regarding Correlation of Distribution to Survival of Cable Networks

Last week, the FCC’s Media Bureau released a research paper entitled A Survival Analysis of Cable Networks. The paper summarized a study prepared by staff of the Media Bureau, which used statistical analysis to estimate the correlation between programming networks’ total distribution and their probability of survival. The study analyzed data for national non-premium networks from 1984 to 2001, with the goal of determining the total number of subscribers cable networks needed during that period to continue operations. Working with limited data, the study examined only the launch and exit of cable networks, and did not explore networks’ financial performance.

The study found that, in order to have a 70 percent chance of survival, a cable network (growing at an average rate) must reach at least 19 million subscribers within five years of launch, and 41.5 million subscribers within ten years of launch. The study also found a strong link between a network’s distribution level shortly after launch and its long-term chance of survival. In short, the study demonstrated, using sound statistical analysis of “real world” data, that widespread distribution is essential for the long-term survival of a cable network.

Of course, this finding is not news to the program networks or cable operators, which have pressed this very point to the Commission in various proceedings (e.g., the “digital must-carry” and “a la carte” proceedings). However, the study will be an objective -- and hopefully persuasive -- source of authority for this important point in the future.