SBCA: One to grow on

At annual convention, DirecTV, EchoStar will look for ways to push combined sub count past 13 million

By Paige Albiniak -- Broadcasting & Cable, 7/17/2000

Now that the satellite TV industry has won its long fight to offer local TV signals, it only has one thing left to focus on: growth.

Subscriber growth-and how to sustain it as cable goes digital-will be a major topic at the annual Satellite Broadcasting and Communications Association conference this week (July 18-21) at the Las Vegas Convention Center.

So far, focusing on growth has served the industry well. El Segundo, Calif.-based DirecTV last week announced that it had signed up 142,000 new customers in the month of June, as well as converting 140,000 Primestar customers.

(DirecTV bought Primestar in April 1999 and has been shifting its subscribers to DirecTV's high-power service over the past year. Approximately 435,000 customers remain subscribers to Primestar's medium-power service.)

That brings DirecTV's total count to approximately 8.7 million customers, up from 5.47 million a year ago.

According to satellite research firm SkyReport, Littleton, Colo.-based EchoStar Communications Corp. has 4,155,000 customers. The company passed the 4 million-customer mark in April, just seven months after hitting 3 million.

The stock of both companies has been taking hits lately, however. EchoStar was trading around $38 last week, after reaching a high near $80 in April. It went up some last week, on the news that the company would be paying a quarterly dividend on some of its preferred stock.

DirecTV's stock fell 7.7% in late June, after the company announced in May that it had added 50,000 fewer customers in that month than it did in April. Last week, however, the stock was trading up slightly, at about $33, after subscriber numbers weren't as low as expected and analysts expressed faith in DirecTV parent company Hughes Electronics.

Both direct broadcast satellite companies will be bringing new presidents to the SBCA Convention, marking the first big all-industry affair for DirecTV President Odie Donald and EchoStar President and Chief Operating Officer Michael Dugan.

Donald comes from regional phone company BellSouth, which this year announced its intentions to develop its own satellite TV service. Donald's primary objective is to turn DirecTV into a profitable company as well as a big one.

Dugan came from within EchoStar, previously working as president of EchoStar Technologies Corp., which makes DBS set-top boxes and other digital equipment for satellite companies, including EchoStar.

But even with new leadership, it's still DirecTV Global Chairman Eddy Hartenstein and EchoStar CEO Charlie Ergen who will do the talking at this year's convention. Ergen is scheduled to kick off the show with a keynote address Wednesday morning at 9:30; Hartenstein will speak at the same time Thursday morning.

With respect to growth, both companies are relying on high-speed data offerings to help them pick up customers. Ergen and Hartenstein are expected to discuss their companies'new broadband initiatives: DirecTV's with AOL, Microsoft, TiVo and Wink; EchoStar's with Microsoft and Gilat Satellite Networks.

Also, both companies are winding up their first phase of launching local TV service in local markets. DirecTV is further along, having signed most of its agreements with TV stations that allow DirecTV to carry the signals. DirecTV still must finalize contracts in Charlotte, N.C.; Indianapolis; and Milwaukee, according to SkyReport.

EchoStar, although it offers 13 more local TV markets than DirecTV, still has 13 more cities in which it needs to get carriage agreements signed. Not surprisingly, most of those correspond with cities where DirecTV has no service.

EchoStar needs to get carriage agreements from TV stations in Albuquerque, N.M.; Baltimore; Cincinnati; Columbus, Ohio; Hartford, Conn.; Jacksonville, Fla.; Las Vegas; Memphis, Tenn.; Milwaukee; New Orleans; Oklahoma City; Roanoke, Va.; and San Antonio.

Of those cities, DirecTV offers service in Baltimore and Milwaukee. The only market where DirecTV offers local service and EchoStar does not is Greenville/ Spartanburg, S.C.

And there are several cities where the companies have some stations signed but not all. For DirecTV, that's FOX affiliate xetv(tv) in San Diego, while EchoStar still needs to sign CBS affiliate WTVF(TV) in Nashville, Tenn., and UPN affiliate WWOR-TV in New York City.