12 Days of a Satellite Christmas - A Look Back at 2004

[Gregg Lengling]

From comments on satellite radio's local traffic and weather services to the satellite TV industry's SHVERA Christmas Tree, 2004 was another eventful year for dish businesses. And all of that stuff and much more happened during the year without any merger and/or acquisition.

So, in the spirit of the holiday season, here's this year's "12 Days of a Satellite Christmas:"

12,000 in Support of Satellite Radio's Local Traffic/Weather - That's the number of letters the Federal Communications Commission got on the topic during the first few weeks of taking comments. Eventually, all pro/con filings ballooned to more than 25,000, most supporting satellite radio. Broadcasters, who vigorously fought the local traffic and weather services at the Portals, could only muster up a few hundred or so comments supporting their position. And all they could do was complain about how satellite radio was hurting their audience share (Hey guys, how about competing instead of complaining ... and how about putting a stop to using the FCC to thwart the best thing that's happened to radio innovation since FM?)

11th Hour of Salvation (Or is it Doom) for VOOM? - Cablevision and Rainbow DBS plan to keep the VOOM satellite TV service running through 2005, with plans to launch additional programming and satellite capacity this spring. Yet VOOM has garnered only about 26,000 customers in more than a year of operation. And Cablevision this week scrapped plans to spin off the VOOM assets with a handful of Rainbow programming assets. Wall Street hopes the company shuts down the operation or sells it, possibly to EchoStar. (As one analyst recently said, "VOOM's new marketing initiative and five new satellites = lose more money faster.")

10 Years for DirecTV - It was June 1994 when Eddy Hartenstein and Co. launched the DBS powerhouse. Today, more than 13.5 million customers get the service, which was acquired by News Corp. this time last year. And so Eddy's work is done, and he plans to retire from the satellite TV giant Dec. 31. Hopefully his departure from DirecTV doesn't mean Hartenstein won't be seen in satellite circles in the years to come.

96,000 Customer Loss for Comcast - The nation's biggest MSO severed ties with that large number of basic cable customers in the second quarter, thanks in large part to small dish competition. Other notable second quarter cable losses were Cox with a 53,000 basic customer loss, 21,000 at Time Warner Cable and 33,000 at Adelphia. Cable blamed seasonality for the customer exodus during the three-month period. Yet we agree with DirecTV's Mitch Stern when he said it's unlikely all of those subscriber losses can be attributed to end-of-semester college student disconnects.

Eight Months to XM's 2 Million - XM launched nationwide in November 2001, reached 1 million customers in October 2003, and eight months later topped 2 million. It's aiming for 3 million at the end of the year. Sirius also is running full steam ahead, reporting 800,000 customers in November and aiming for 1 million by the close of 2004.

7.62% Kentucky Dish Tax - State taxes on satellite TV were big again in 2004, with the Bluegrass state pondering a 7.62 percent levy for consumers with small dish services. The proposal, fought vigorously by industry interests, didn't pass. A proposed tax in Arizona also didn't pass, but a tax on cable and satellite TV won approval from state lawmakers in Utah.

Six Months of a la Carte Debate - A la carte talk mushroomed in April when Georgia Rep. Nathan Deal attempted to attach program choice mandates to satellite TV legislation. The provision didn't make the final cut with lawmakers, but they asked the FCC in May to deliver an a la carte report in November, work for which began in earnest a month later. The commission's autumn conclusion: a la carte won't work.

$500 million for Howard Stern - That's what Sirius paid to get the shock jock exclusively beginning in 2006. The deal also led to former Viacom exec (and former Stern boss) Mel Karmazin joining Sirius as CEO. Also in 2004, Sirius launched its $220 million NFL coverage. XM also spent big bucks in 2004, paying $650 million for exclusive coverage of Major League Baseball.

Four Future Satellite Launches - DirecTV's plan to launch two SpaceWay satellites next year for delivery of up to 500 local HD channels and two additional satellites by 2007 for carriage of another 1,000 local high-def stations has the potential to radically change the competitive landscape for the small dish. And for cable and its HD plans.

Three-Way Litigation - First, DirecTV settled its lengthy legal skirmishes with the National Rural Telecommunications Cooperative. Then it settled its bitter dispute with Pegasus. The No. 1 DBS player got NRTC/Pegasus subscribers, NRTC members were given a chance to keep their DirecTV business (though not on an exclusive basis), and Pegasus got $875 million. Joy to the world.

Two Program Skirmishes - EchoStar's programming carriage dispute with Viacom led to the loss of CBS, BET and MTV channels for DISH Network subscribers during a brief moment in March. EchoStar avoided taking another ugly program carriage spat overboard when it reached an agreement in April with Turner for delivery of such networks as CNN Headline News, Turner Classic Movies, Boomerang and Cartoon Network.

And ... One SHVERA Christmas Tree - This year's the Satellite Home Viewer Extension and Reauthorization Act (SHVERA) had the potential of becoming a pine-needle Yule bush decorated with all sorts of lawmaker items somewhat related (or not at all related) to the business, including a la carte. Instead, this year's SHVERA Christmas tree had hung from its highest boughs such ornaments as digital white areas, a plan for all sides to work out royalty rates, and an extension for satellite delivery of superstations and distant network signals.

(Do you have an opinion of what should be the top satellite story of 2004? Participate in our poll at: http://www.skyreport.com.)


 
Have a Safe and Happy Holiday Season!
Happy holidays from the staff at SkyREPORT, SkyRETAILER and The BRIDGE.

Please note, due to the holidays, SkyREPORT will provide limited updates next week - only for Tuesday, Dec. 28 and Wednesday, Dec. 30. If big news breaks, SkyREPORT will have it covered during the season.