SBD/Issue 216/Sports Media

Satellite Subs Slow As Cable Companies Offer New Services

DirecTV and EchoStar are “seeing a sharp slowdown in the number of new subscribers” as the cable-TV industry, after “years of seeing satellite steal market share and customers, ... is regaining ground,” according to a front-page piece by Angwin & Pasztor of the WALL STREET JOURNAL. In the last year, gains by the two satellite services “have shrunk to half of what they were during the industry’s heyday early in this decade, and they are projected to decline further.” Meanwhile, cable companies like Time Warner and Cablevision are “wooing customers by providing video, telephone and high-speed Internet services in an attractively priced ‘triple play’ bundle.” EchoStar CEO Charles Ergen earlier this year said cable’s offerings are “stealing good customers away from us.” Angwin & Pasztor noted DirecTV and EchoStar have “teamed up with phone companies to offer high-speed Internet access,” but those partnerships “are fraying now that the phone companies are ramping up their own competing television products.” Subscription services “now can reach most of the nation’s 110 million households.” Around 66.5 million homes have cable and 27 million use satellite. Harris Associates analyst Kurt Funderburg, whose company owns shares in both DirecTV and EchoStar, said, “If there’s no merger, it’s a tough row for them to hoe.” DirecTV investor Morris Mark sold his entire 420,000-share stake in the company in the past few months “because he is so pessimistic about the sector” (WALL STREET JOURNAL, 8/5).

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