Reasons for Not Having Multichannel Television

In a previous paper, we listed the reasons why people choose to have multichannel television. There, we saw the major reason was that people wanted to get more television channels.

There is a reverse side to the coin. Some people have multichannel television, and some people do not. It is just as important to understand why people do not have multichannel television. The following chart shows the major reasons listed by non-multichannel television persons in the 1997 Los Medios y Mercados de Latinoamérica study.

What might one infer about the growth potential for multichannel television in Latin America? First of all, 14% of these people currently live in areas without multichannel television, and therefore have no choice in the matter right now. These people are good prospects when multichannel television arrives there. Some of these people live in remote areas which may never be wired for cable television, so that Direct-To-Home satellite television may be their only choice eventually.

The other listed reasons are more problematic. For people who are not particularly interested in television, or in acquiring more television channels than they already have, multichannel television will be a tough sell.

But by far the most often cited reason (at 51%) is the cost of multichannel television. There is considerable variation in the costs for multichannel television across Latin America, ranging from over US$40 per month (in Brazil) to less than US$1 per month (in Colombia), just as there is considerable variation in incomes across Latin America. Nevertheless, when the average cost exceeds US$30 per month, many people will not be able to afford what might be considered a non-essential luxury service.

The high cost for multichannel television may be a temporary condition. In the case of Argentina and Chile, for example, non-addressable cable television converter boxes are commonly used. This means that the one gets either all the channels (usually over 70 different ones) or nothing, and this explains why the cable bill often exceeds US$30 per month. For competitive reasons, cable operators feel that they have to offer a broad range of channels, and having fewer channels at lower cost is not considered a viable option. In the future, when addressable cable television converter boxes begin to appear (example), there may be different tiers at different price levels, which would make multichannel television more accessible to the populace.

(by Roland Soong, 2/2/98)

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