News

DBS Keeps Punching in Cable Markets

8/20/2000 8:00 PM Eastern

Direct-broadcast satellite continues to make inroads into suburban and urban markets, the Satellite Broadcasting & Communications Association said last week.

According to a SBCA-commissioned study by The Yankee Group, about 7 percent of urban television households in the United States subscribe to DBS, up from 4 percent a year ago. The suburban penetration rate for DBS is 13 percent, up from 9 percent last year.

DirecTV Inc. last week named seven new markets in which it plans to roll out local broadcast packages within the next two months: Portland, Ore.; Nashville and Memphis, Tenn.; Cincinnati and Columbus, Ohio; San Antonio; and Kansas City, Mo.

By late October, DirecTV will offer local broadcast packages in 37 markets, representing about 60 percent of TV households.

Also last week, EchoStar Communications Corp. announced that regional consumer-electronics retailer P.C. Richard & Son will sell Dish Network hardware and programming in its 42 New York-area stores starting next month.

EchoStar is also in the midst of one of its most aggressive anti-cable ad campaigns to date, backed by television, radio, print ads and billboards.

The print ads tie anti-cable messages into an overall jungle animal theme, with catchy phrases such as "Your cable bill is a croc" next to a picture of a crocodile and "Tired of feeling cheetah'd by cable?" next to two cheetahs.

"We try to have fun with our ads," Dish director of creative services Arnold Gonzalez said.

In the television ads, two children are featured playing with toy animals, with one telling the other, "Dad says cable is a snake in the grass," according to EchoStar spokesman Marc Lumpkin.

While cable markets are seen as prime feeding ground for both DBS providers, industry insiders conceded that cable operators have an advantage when it comes to broadband-data services in areas where they deploy cable modems.

Starting this fall, DBS will start marketing two-way high-speed Internet access to consumers, with a focus on rural areas and pockets of metropolitan markets not yet wired for cable modems or digital subscriber lines.

"There are lots of households today, and maybe even five years from now, that will not get broadband connectivity terrestrially," Gilat-To-Home director of marketing Fritz Stolzenbach said at a Kagan Seminars Inc. conference in New York last week.

Gilat-To-Home is pilot-testing its two-way broadband service, which it plans to launch in October in RadioShack Corp. stores. Several thousand people are now testing the service, including Dish dealers that plan to sell bundled video and broadband satellite systems.

Stolzenbach said the company would introduce a new brand name for the product before its launch this fall. Pricing has not been set.

September