Euro cable will get fatter

'Upside' vast with 16 mil digi subs

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

The sector is forecast to add 6 million digital television subscribers across the continent this year, bringing the total to 16 million, according to Cable Europe president Manuel Cubero.

"There's tremendous upside for channel suppliers," said Cubero, who also is vp at KabelDeutschland, Germany's biggest cable network. "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 such private-equity operators as Providence Equity Partners and Cinven, who are consolidating small- or medium-size 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," he said.

Over time, the digital cable's interactive potential means that the sector also could 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," Greenwich Consulting Benelux CEO Thierry Bouffioux 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."