To: DiViT who wrote (36817 ) 10/20/1998 7:37:00 PM From: John Rieman Respond to of 50808
Satellite HDTV plans..................... WILL DIGITAL TV HELP SATELLITE BROADCASTERS BEAT CABLE? For direct-broadcast satellite (DBS) operators, the advent of digital TV would seem to be bad news. After all, until now, DBS broadcasters have had a monopoly on sending high-quality digital signals. From Nov. 1, a growing number of local and cable broadcasters will send standard- and high-definition signals, too. But the DBS industry isn't worried. It thinks the move to digital will help mitigate DBS's biggest competitive disadvantage against cable: the inability to deliver local signals. For DBS operators, gearing up for high-definition TV (HDTV) involves minor investment and promises almost certain losses over the next few years. Still, both DirecTV and EchoStar (DISH) are moving forward to soon launch minimal HDTV programming with more coming next year. (PrimeStar isn't a player in HDTV). Since local and cable broadcasters' delivery of HDTV will be spotty at first and will never blanket the entire country, DBS will be the only nationwide service for HDTV. DirecTV, whose 4 million-plus subscribers make it the industry leader, began tests of HD transmissions in January and plans to begin real broadcasts in November. At first, it will broadcast primarily promotional programming, mostly movie and sports clips, aimed at retail showrooms. In the first quarter of 1999, DirecTV and its partner, U.S. Satellite Broadcasting (USSB), plan to add HBO's HDTV channel, probably for no extra cost. This could quickly lead to pay-per-view programming. POCKET CHANGE. So with two channels, and no new revenues, DirecTV doesn't expect many pure returns from its HDTV efforts. "We think two national channels will be sufficient for the next couple of years," says Larry Chapman, executive vice-president at DirecTV. "But if there's more demand, we'll consider expanding." Meantime, while small, there will be costs. Chapman estimates that $3 million to $5 million has been spent to equip the uplink facility with encoders, routing infrastructure, monitors, and other gear. Some additional costs for transponders, at $100,000 to $200,000 per month, will also be incurred. DirecTV expects to get one or two HD channels per transponder, compared with seven or eight for standard-definition TV. "No, we won't make any money," Chapman says. "Maybe in three or four years." more.....................businessweek.com