Dishing it out
By Scott Kirsner
Hollywood Reporter
September 15, 2005
http://www.hollywoodreporter.com/thr/television/feature_display.jsp?vnu_content_id=1001137310
Rabbit ears and network broadcasters still ruled the TV world in 1980, when
Charles Ergen founded the company that became EchoStar Communications, but
today's marketplace is far more competitive.
"You've got about 83% of American homes who get cable or satellite," says
Bruce Leichtman, president of Durham, N.H.-based Leichtman Research Group.
"This is a far-more-saturated overall market -- the green-field opportunity
is just not there like it was before."
According to the Consumer Electronics Assn., of the 110 million U.S. homes
that own at least one television set, 68% subscribe to cable, 22% use a
satellite dish, and about 3% use both cable and satellite. The research
firm Sanford C. Bernstein & Co. projected in May that the cable and
satellite subscriber base is growing by about 3.6% annually, with more of
that growth coming recently from satellite subscribers. But as cable
operators and satellite providers eye each other's customers, new entrants
are jumping into the scrum.
Cable operators
Cable companies have been expanding their video-on-demand content and
emphasizing the speed of their broadband Internet connections, but their
main focus is creating a compelling "bundle" for consumers, adding
voice-over-Internet telephony to their video and data offerings. Cox
Communications boasts more than 1.5 million telephone customers, and
Comcast expects to reel in 200,000-250,000 phone customers by year's end.
Direct broadcast satellite
DirecTV and EchoStar are focused on poaching subscribers from cable
operators, rather than signing up new customers who never before have
subscribed to a pay TV service. The subscriber populations of both
companies are still growing -- EchoStar's is 11.5 million, and DirecTV's is
14.7 million -- but both experienced year-to-year drops in new-subscriber
tallies during the most recently measured quarter. DirecTV has been
dangling discounts of late, but an entry-level subscription to EchoStar's
Dish Network remains about $10 a month cheaper.
Tech companies
Not surprisingly, several technology companies are betting on video
delivered through the Internet, rather than over the air or through coaxial
cable. Akimbo Systems is selling set-top boxes that store
Internet-delivered video content -- devices that eventually could allow
consumers to do away with their cable or satellite subscriptions --
Brightcove Networks is developing an Amazon.com-like marketplace for
Internet-delivered video content to be viewed on a desktop PC or on a
Microsoft Media Center device connected to a TV set, and TiVo has announced
partnerships with the Independent Film Channel, the Open Media Network and
Netflix to send content straight to TiVo through a high-speed Internet
connection.
Telcos
Telcos hope to build bundles of their own by adding video to the voice,
data and cell-phone services they already offer. SBC Communications is
spending $4 billion to roll out its Internet protocol television service,
code-named Project Lightspeed, to 18 million households by 2007 (IPTV
usually is delivered through fiber-optic lines), and Verizon and Microsoft
are working together on FiOS, a video, voice and data package expected to
reach 1 million homes in California, Florida and Texas by year's end. The
flexibility of IPTV could allow consumers to create customized channel
lineups or choose from a vast selection of on-demand programming.
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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