The Economics Of Going Addressable (1985)

By Michael N. Errnolovich, General Instrument Corporation

While many cable operators have become acquainted with the state-of-the-art features inherent in addressability, few are aware of the attractive cost and revenue benefits that accompany this technology.

This paper will present a computerized model that was developed to demonstrate the attractive financial benefits of addressability. It compares the decision to go addressable with more traditional CATV approaches, namely, plain and pay cable systems.

The comparison will be made in four key areas: capital investment, operating costs, new profit opportunities, and other addressable advantages (optional).

This is a flexible model capable of accepting individualized inputs and performing analyses based upon various system decisions such as upgrades, replacement equipment or new build. The model provides a customized payback analysis based on the areas of consideration. It can produce "pro-forma" income statements and associated net present value (NPV) analyses.

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