`Death Of DBS' & Other Non Sequiturs
By TWICE Staff -- TWICE, 5/15/2000
This was manna from heaven, at least for a columnist or editorial writer. I was about to start my day by writing an editorial about my family becoming a new direct-broadcast satellite owner (more about that later) when a headline from sister publication www.multichannel.com came to my attention: "Analyst Predicts Death of DBS."
Intrigued, I read the story. Credit Suisse First Boston analyst Laura Martin is quoted as predicting the demise of the DBS business as cable companies gain momentum in rolling out advanced services. Described as one who is "no stranger to making provocative statements," Martin asserted that DBS subscriber growth was not due to cannibalization of cable subscribers, but due to subscribers from C-band satellite and Primestar moving over to DirecTV and EchoStar Communications. Aside from getting plenty of media attention for her "provocative" statements, who is Laura Martin kidding?
My family's decision to drop Time Warner and move to DBS was probably not unique. It was a mixture of service, picture quality, programming choices and price. (For instance, the picture of local channels that we received from our 12-year-old rooftop antenna looked like digital television vs. the performance we'd get out of our cable boxes on an average day.)
I bought a dish and three additional boxes at a well-known retailer in the New York-metro area during early April. At the store I was told installation would take seven to 10 business days. It took three weeks. Why? Well if you believe the installation company, which covers New York City and Long Island, during the past couple of months weekly sales are triple what the chains had expected. Even if the number is double the expected amount, are all those new customers old C-band and Primestar customers, Ms. Martin?
While my family and I love the new system, there are three things we miss about Time Warner. The first is NY1, the cable system's 24-hour news station, which is the best TV news source in the city. We have to rely on our outdoor antenna to get channels 9, 11 and 13, which is a minor inconvenience. And the Weather Channel doesn't provide the detailed local forecasts on DBS that it does on cable.
That being said, members of my family are happy with the purchase and were bemused spectators a few days later Time Warner when dropped Disney's ABC station, WABC, from its system on May 1. In a public relations gaffe that should be remembered for years, Time Warner, which owns Time magazine, Sports Illustrated, CNN, etc., etc., made Disney look like a media version of a 97-pound weakling.
But this is all perception. Poor Disney? It owns a major movie studio, theme parks, ABC, ESPN, sports teams and many other holdings. Even with the company's well-documented problems in the past couple of years, it is still a powerful media force.
Poor Time Warner? Well, things have gotten so bad since May 1 for Time Warner that some in the media have actually suggested that the government should just fine Microsoft instead of splitting it up and begin to stop the Time Warner/AOL merger. (Will the latter happen? Don't hold your breath.)
Getting back to the battle of cable vs. DBS, check out the page one story in this issue on DirecTV's deal with Blockbuster, which will give the video rental chain the opportunity to sell DirecTV hardware, subscriptions and pay-per-view programming through its 5,000 outlets. Somehow I don't think Blockbuster sees its DirecTV opportunity only coming from former C-band or Primestar satellite dish customers.
If the development of DBS proves anything, it shows that every business needs competition. Who knows? Maybe in the future when Time Warner and other cable systems are able to offer advanced services, it will actually improve its product, pricing and customer service so it can put some pressure on DirecTV and EchoStar. -- Steve Smith
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