SBCA '97: Think Bigger Than Local

Opening ceremonies for the Satellite Broadcasting and Communications Association's show in Las Vegas focused on access to local channels.

And the first day of the three day conference included a warning from one panelist that local programming isn't the only thing the industry has to promote. According to PrimeStar Chairman and CEO Jim Gray, DTH satellite services are presently "dominated by local channels. But we have a much bigger message to send."

"We don't want a repeat of 1996. We have a wonderful message to tell."

DTH satellite's lack of local broadcasts, an issue cable TV has utilized in attacks on its major competitor, has brightened with recent moves by EchoStar and Sky partner News Corp. Both want to deliver local channels through their 500-channel, eight-satellite-constellation alliance.

While local programming has attracted a lot of attention, Gray said DTH companies need to send a bigger message about what satellite can offer. "I want to raise a bit of caution in 1997, and that is public discussion shouldn't be dominated by local channels."

Keeping with the local broadcast potential, however, DirecTV President Eddy Hartenstein said his company plans to tap those channels through off-air antennas, an option already available to consumers. DirecTV also is working with DSS manufacturers over integrating an antenna with equipment, he said.

Hartenstein also spoke out about white area issues, saying consumers living in areas where affiliate signals can't be reached should be allowed to receive network programming.

Concerns over white area rules can be worked out between satellite services and the broadcast industry, according to Edward Fritts, president of the National Association of Broadcasters. Fritts, speaking about the partnership between broadcasters and satellite services to settle white area issues, said harmony between both sides can be reached because "satellites are better" and local is a "cable issue."

But he added the broadcast industry is worried about copyright infringement. And he said broadcasters still feel threatened over the continuing sale of network programming to customers in areas considered capable of receiving local affiliate signals.

Fritts, for his part, admitted being "asleep at the switch" as DTH penetration accelerated past the NAB's projections at a pace that surprised them as much as the growth of cable. And, now, cable is the "local competition" to broadcasters.

In other news on the first day of SBCA '97:

-A keynote speech from North Dakota Sen. Tom Dorgan included references to small town values and sounding of a cautionary note to companies embarked on "concentration in broadcasting and cable."

-EchoStar's Charlie Ergen received the annual Arthur C. Clarke Award. Dennis Lewis of Lewis Communications in Newberg, Ore., received top dealer honors.

-Thomson Consumer Electronics unveiled a third-generation RCA DSS system, which will roll out later in the year.

-PrimeStar announced the successful transition to GE-2. The satellite will allow the medium-powered service to increase its line-up to 160 channels.

-U.S. Satellite Broadcasting will add Showtime 3, bringing the number of channels from Showtime Networks to eight. USSB and Showtime also announced that both are working together to develop new programming offerings based upon research of DSS viewers.

Gray Discusses PrimeStar Restructuring

A restructuring of PrimeStar won't occur through a takeover or sell-out among five of the cable TV partners, according to PrimeStar Chairman and CEO Jim Gray.

Instead, Gray said, the partners will create an entity more focused on a single, nationwide mission.

"The partnership has served us very well. But we have grown larger, and it has become increasingly more difficult (to operate in the present structure," Gray said Tuesday at SBCA '97. "With a single point of management, we will be significantly more competitive."

Past restructuring rumors included TCI Satellite buying out partners, most notably Time Warner's share. Reports also surfaced in the past other partners, such as Continental Cablevision, would sell their stake in the DTH venture.

Gray dismissed both scenarios, and said a restructuring won't give any partner a majority interest. He offered a possible restructuring proposal, with TSAT taking a 35 percent to 40 percent stake and Time Warner obtaining a 30 percent to 35 percent interest.

But he added more work must be done among partners before the restructuring is complete.

If PrimeStar became a publicly-traded company, it may be put under the auspices or TSAT, which began trading as a public stock late last year. "It's not a takeover by TSAT," Gray stressed. "But TSAT provides us with a vehicle (to go public). It's a free-standing entity, it's a shortcut for us."

Gray also reported PrimeStar is close to announcing an equipment vendor for its proposed "Cable-Plus" high-powered DBS/cable add-on business. The ancillary unit successfully launched its satellite earlier in the month.

PrimeStar also announced the successful transition to GE-2. The satellite will allow the medium-powered service to increase its line-up to 160 channels.

AlphaStar Debuts Spanish-Language Lineup

AlphaStar unveiled a comprehensive lineup of Spanish-language programming for the North American market, expanding on its niche offerings.

Spanish-language programming is available in four packages - SpanishBasic, SpanishValue, SpanishPlus and SpanishDeluxe. Selections include premium movie channels such as Showtime, HBO, Starz!, and Encore, and a full complement of news, family entertainment, sports and educational channels. Also available are Spanish music channels.

In addition to its Spanish-language programming launch, AlphaStar is preparing the debut of French-language programming in the United States. AlphaStar's sister company has a comprehensive French-language lineup for the Canadian market, part of which it plans to bring to the U.S. market.

Malone: DBS Not That Scary

Tele-Communications Inc. head John Malone told a news conference in Japan his company isn't afraid of DBS services, and added fiber optic networks will be the "dominant distribution technology" for broadcasting video and personal computer connections.

"We have learned that the satellite economic bubble is not necessarily as scary to a cable operator as it might appear," Malone said Tuesday.

Satellite companies, according to Malone, will face hurdles in meeting break-even goals. Customers also may see increases in subscription rates such as those recently passed on by DirecTV, Malone predicted.

"The break-even point for DirecTV, I'm told, is 4.5 million customers...they are at two to three million today," Malone said.

Disney May Buy Cinergi

Walt Disney Co. is reportedly close to buying Cinergi Pictures for about $20 million, Daily Variety reported.

The agreement, which could be completed and announced as early as this week, would give Disney access to Cinergi's library, which included films such as "Nixon" and the recently-released "Evita."

The deal also would include a small amount of cash, Daily Variety said. The film studio would complement Miramax Films, which Disney bought a few years ago. Miramax was responsible for hits like "Pulp Fiction" and a number of Oscar nominees this year, including Best Picture winner "The English Patient."

In addition to Miramax, Disney owns Hollywood Pictures, Touchstone and Disney studios.