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The prospects for large systems at the edge of major markets
(Table 6) are brighter.
In the top 50 markets penetration is in the
34-38% range with rates of return 11.0-12.6%.
In the second 50
markets penetration ranges up to 45% with rates of return from 9.7
In the smaller markets and also the fringe (outside) areas
we find more heterogeneous results, with quite profitable CATV
possibilities where fewer than three networks are available.
The corresponding intermediate-sized edge systems are again
unprofitable in all 3 network cases. This indication of the importance of large systems, or economics of scale in technical terms, is developed in more detail in Table 8, by systematically varying the size of the most profitable system from each of the
four market types in Tables 4-7. While large systems would seem
feasible in the major metropolitan areas, as of March 1971 only
20 systems had more than 20,000 subscribers and the largest had
less than 50,000 W/.Some fraction of these economies of scale can
be achieved when a series of smaller systems are under common ownership and thereby realize savings from efficient use of
management and technical personnel and can share local programming and
and signal importation expenses.
The results presented in tables 4-8 are based on market, economic
and construction factors which typify the most common situations
which will be encountered in middle and edge locations of each of
the four types of markets. Of course, within each category there will be a degree of variation, clustered around the typical situa
Television Digest, CATV and Station Coverage Atlas.
4. 3NV, 1EU 5. 2NV, INU 6. INV, 2NU
7. INV, 2NU
Underground=5% 10.7% 10.2% 9,7% 4.9%
18.4 17.8 12.0
IN, 11, 12
IN, 31, LE
#=Minimum origination facilities and no advertising revenues