Euro cable offers Hollywood goldmine

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CANNES -- Europe's burgeoning cable sector represents a potential goldmine for Hollywood studios and content providers, trade body Cable Europe said Wednesday.

The sector is forecast to add 6 million new digital television subscribers across the Continent in 2007, bringing the total to 16 million subscribers, according to Cable Europe president Manuel Cubero, who is also vp of Germany's biggest cable network, KabelDeutschland.

"There's tremendous upside for channel suppliers," said Cubero. "As the number of subscribers grows, so does the revenue for the content supplier. The number of digital pay TV channels rolling out in Europe is growing very fast."

The cable industry is on an accelerating growth curve driven by the digitization of analog cable systems and an influx of investment into the sector from private equity operators such as Providence Equity Partners and Cinven, who are consolidating small- or medium-sized players into operations of significant scale.

By the end of 2005, there were 7.2 million digital cable subscribers in Europe, a figure that grew to 10 million by the end of 2006, with Germany, the Netherlands, the U.K. and Romania remaining the biggest territories overall.

"We believe that growth will continue to accelerate," Cubero said.

Over time, the digital cable's interactive potential means that the sector could also account for significant volumes of interactive and targeted advertising, according to research produced by the trade body.

"The cable industry could further monetize its fast-growing digital television base by providing interactive and enhanced advertising," Thierry Bouffioux, CEO of Greenwich Consulting Benelux, said.

"The digital cable TV set-top box provides the cable operators plenty of information about the preferences and behavior of their digital television customers."
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