Seven advantages of using digital transmission in the CATV industry are given, and two of these advantages are discussed at length. A CATV system using digital signals can be significantly less expensive than a conventional system. The ratio of the cost of cables and amplifiers for a conventional system and a digital system is determined and bounded above and below, The economic advantage of the digital system increases as trunk lengths increase. This economic advantage can be further increased by using picture coding techniques to reduce the required bandwidth. The field of picture coding is reviewed and the most important results which have been obtained to date are referenced, The potential to transmit three digital, picture coded standard television signals in a conventional 6 MHz bandwidth is discussed,