Monday, November 08, 2010

The Entertainment Poverty Gap

It seems that the gap between the UK and the US is growing when it comes to the effects of the recession on cable cutting.

GigaOM reports that US cable companies have lost over half a million subscriptions in the past quarter, whilst in the UK both Virgin Media and BSkyB are reporting improving subscriptions and average revenues per user.

The reality is, perhaps somewhat different. The US has a large proportion of its population living under the poverty line. Indeed, according to the OECD the poorest ten per cent of Americans have an average income of just $5,800.

The reality is that the US is fast becoming India - a country where the wealthy are tremendously wealthy, but where the majority are becoming relatively less affluent. For entertainment companies, this is a disaster. It is hitting cinema attendances and now, seemingly, cable subscriptions.

It is perhaps not surprising, then, that US companies such as Warner Bros are turning to the UK for growth.

The UK may be in an era of austerity, but it doesn't extend as far as cable cutting.