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DBS Promos Counter Cable Buyback Moves

7/30/2000 8:00 PM Eastern

The direct-broadcast satellite industry is stepping up the promotional pressure this summer with new offers designed to take subscribers away from cable.

EchoStar Communications Corp. earlier this month began a "Dish Network Rewards Refer-a-Friend" promotion, which gives current subscribers up to $100 in free programming if they convince a friend or two to switch to the DBS service.

Cable is not standing still. AT & T Broadband, for one, has been offering $200 in free programming for Denver-area satellite customers who switch back.

Dish is devoting one of its own on-air channels to promoting the offer 24 hours per day, recommending that subscribers pitch the company's new "Digital Dynamite" lease model to their friends and relatives.

The company also hopes current customers will help to spread the word about Dish's free premium-movie promotion, which offers new customers who take expanded programming packages three free months of three premium-movie plexes.

Refer-a-Friend information is also available on the dish-network.com Web site, and the company plans a direct-mail drop, according to an EchoStar spokesman.

The Refer-a-Friend promotion runs through Oct. 31, and residential subscribers who were in good standing July 17 are eligible. Dish dealers cannot participate directly in the promotion.

Dish subscribers receive up to two $50 programming credits-one for each new Dish customer who provides the company with the original subscriber's account number.

DirecTV Inc. reseller Pegasus Communications Corp. launched a two-for-one satellite-receiver promotion for new customers last week. Participating Pegasus dealers will receive a $130 commission to help offset the cost of the hardware, Pegasus spokeswoman Kim Fanning said. Retailers who offer $100 discounts on professional installation as part of the promotion will receive additional $100 subsidies.

"It's a way for us to get into homes that have more than one television," Fanning said, because it overcomes the issue of pricing. "It's a way to attract consumers who may have shied away from satellite TV in the past."

The Pegasus promotion runs through December. The company plans to start an ad campaign in support of the promotion soon, and it will also supply its dealers with in-store point-of-purchase materials.

DirecTV itself plans to keep up the promotional heat through the second half of the year, CEO Eddy Hartenstein said two weeks ago in a call with analysts.

The company currently supports a discounted installation offer at retail, and it plans to introduce a promotion tied to its popular "NFL Sunday Ticket" National Football League package early next month.

Although no details were given for the remainder of the year, the company is likely to bring back some variation of free programming and free installation offers that have been successful in the past.

DirecTV is also close to naming a new agency for its general-market advertising account. The short list has been narrowed down to Deutsch Advertising, D'Arcy Masius Benton & Bowles and San Francisco-based GMO, spokesman Robert Mercer said.

September