The biggest fear in the cable and satellite TV industry is that the growing availability of video programming over the Web through Netflix (NFLX), Hulu and a host other services will lead to rampant cord-cutting that could create the kind of steady erosion in customers that the wireline phone companies have been seeing for many months now.

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But those hardware bases are on the decline: Witness the MacBook Air, which contains no CD drive, and the increasing availability of Bluetooth MP3 players and satellite radio in cars.

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Yet despite high costs of entry and regulatory limits on spectrum availability and infrastructure investment, new technologies (LTE, satellite, microwave, and higher-frequency communications) and new competitors continue to enter the market all the time.

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Falling prices for Blu-Ray and HD DVD players have helped, as has the expanding availability of HD programming from TV broadcasters and cable and satellite companies, which has conditioned more consumers to expect high-def picture quality, Holden says.

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