log ( Technical details of the penetration equation are summarized below. For further discussion see R. E. Park, "Prospects for Cable in the 100 Largest Television Markets." Y = The Penetration Equation Pen C = > Pen iNnetwork D = I = independent E educational F = foreign = -8.159 + 3.098 log XN+ 0.290 log XD +0.212 log XI + 0.298 log XE 0.540 log XF -1.473 log P + 1.398 log Y + 0.523 log C 1 +0.73lu 1 + W duplicating network i Wi = number of cable signals of type i median family income color set penetration Vi = number of B-contour off-air UHF signals of type i Vi= number of B-contour off-air VHF signals of type i Pen= penetration = subscribers/households passed by cable P = annual price u = UHF set penetration (1-a1.6) 1/1.6 + (1-al.6) 1/ Vi 5) 1/1.6 In order to use Park's estimated equation to predict penetration for the typical systems investigated in this report, representative values must be assigned to the variables of the equation. The following values are employed in all of the simulations: P = $62.40, corresponding to the $5 per month plus $1 C = 50%. The effect of varying color set penetration In simulating cable systems for this study, we consider systems located in the central area of a television market, where off-the-air signal quality is generally high, and outlying areas of the same market, where quality is diminished. In the penetration equation the distance variable d is a measure of the reduction in quality. A d value of 0 corresponds to a viewer in the center of the market, while a value of 1 represents a viewer at the B-contour of the off-the-air signal. For the systems in this study we have used the following values: In middle markets: d = 0 for local stations d = 1 for viewing-test stations In edge markets: d = 0.5 for local stations d = 0.75 for viewing-test stations |