Viva DBS!: Satellite for the People

by Alice Patterson
Spring 1998

Not too long ago, the idea of receiving TV signals in our homes from satellites in outer space seemed beyond the realm of most people. After all, what would be the need? With remote controls in hand, John and Jane Q. Public were happy scanning the channels that their local broadcast or cable provider offered them. But were they really happy? Maybe not. There were times when John couldn't see his favorite college football game because his cable company didn't offer the channel. And Jane was miffed because her cable company didn't offer The Learning Channel or a satisfactory movie selection. Tempers started to flare.

Then came skyrocketing cable rates, plummeting service, spotty signal strength and limited channel options. Cable dissatisfaction grew proportionately. A large C-band satellite DISH was one cure, but it was expensive, ugly and obtrusive. People were unhappy. They hoped for a better way.

As it turns out, a few ingenious minds anticipated this unrest and dissatisfaction. They were already engineering ways to increase programming choice, improve picture and sound quality, and provide viewers with an affordable and reasonably-sized interactive alternative to cable television. Their solution? Direct Broadcast Satellite (DBS).

The main reasons 5.5 million people have switched from cable or broadcast to DBS since it was first introduced about four years ago are increased channel choices and the digital picture and sound quality. When it comes to channel selection, DBS wins hands-down. While there are basically five major broadcast networks (ABC, NBC, CBS, FOX, PBS), and the typical cable company can offer its customers around 55 channels maximum, the typical DBS system offers between 150 and 200 channels. With the three main DBS partnerships--Hughes/DirecTV/USSB, EchoStar/DISH Network and Primestar--in heated competition for the nation's home viewers, hardware systems are priced at their lowest levels ever and monthly programming packages are being priced comparably to cable. Interestingly, the digital music channels each DBS service offers, grouped by music category and commercial-free, are also very high on the list of reasons people enjoy their home satellite systems. All of this has combined to ignite a DBS explosion. As one example, EchoStar, which provides DISH (Digital Sky Highway) Network programming, recently launched its third satellite to increase its channel capacity and dropped the purchase price of its hardware to as low as $200. Hughes, which provides DirecTV and USSB programming, has countered by offering dual DBS and satellite Internet service and encouraging the manufacturers of its satellite receivers (Sony, RCA, and more than a dozen others) to lower their prices significantly as well. Primestar has entered the fray with increased channel offerings, discount $99 installation packages and a new "hyper-surf" remote control.

Give Me Some Space

The idea of TV transmissions being beamed into our living rooms from the outer limits poses some basic questions. The way it works is pretty simple from a conceptual standpoint: TV programming is broadcast to small (18 to 36 inch diameter) DISH receivers from satellites positioned at various orbital "slots" in space. These slots make up the "DBS Spectrum," and are named according to their position in orbit. For example, Primestar distributes programming via one of its satellites positioned at the 85-degree West longitude position. These longitudinal slots along the DBS Spectrum can be thought of as orbital "real estate."

The satellites orbit the Earth 22,300 miles above the equator and rotate at the same relative speed and direction as the Earth's surface (known as a geo-synchronous orbit) and beam programming and information directly to receiving units (the satellite DISH). The concept is also known as direct-to-home television.

The ways the various DBS systems actually deliver these signals to our living rooms varies, but each DBS service transmits a digital "bit-stream" which contains compressed audio, compressed video, authorization information, program guide information, and other data. This information is decoded and converted by the satellite receiver set-top box into video and audio that can be displayed on a conventional analog TV set. Hughes and EchoStar use the MPEG-2 compression standard, while Primestar uses a proprietary format called DigiCipher -1.

As a consumer, there are a couple different options for getting DBS. You can buy a satellite DISH, install it yourself (or pay someone to install it for you) and purchase programming for a monthly fee from either the DirecTV/USSB or DISH networks. Or you can subscribe to the Primestar service, which charges a monthly fee for the package: equipment (DISH, set-top box, and remote control), programming and installation and maintenance. The digital signal quality is roughly comparable between the various systems, so programming, pricing options, hardware availability and ownership/leasing variables are typically the reasons people choose one DBS system over another.

Programming starts as low as $6 per month and runs as high as $50 per month, potentially more if you want to subscribe to a specialty sports or adult programming service. It also may be possible to get high-speed Internet access service with your satellite DISH, but it's likely to remain pretty expensive, so that may or may not be a factor in your decision. Once you've decided on the programming you want, then look at the equipment options-- the DISH, receiver and installation kit (if you are buying and installing yourself). There's a price war happening right now, so specials, discounts and coupons can lower the price considerably.

Now, consider how much you are willing to pay per month for TV, compare the various DBS packages that include the channels you want, look at what you would pay your cable company to provide comparable programming, and you're ready to make an informed decision.

The Players

Initially, skeptics theorized that DBS wouldn't be able to provide key features that the public would undoubtedly demand. Things like local programming services, movies-on-demand, two-way service via satellite and other forms of software delivery wouldn't be possible, they thought. They thought wrong.

Depending on the service, it is already possible for DBS consumers to access local programming, order pay-per-view movies, and receive the Internet, and the future has plenty more technological advancements in store.

The battle to win subscribers in the direct-to-home satellite TV war is currently being fought by Hughes, EchoStar and Primestar. A company called Teledesic recently launched a system of low-orbiting satellites to provide wide area satellite Internet service. But while it may be possible to compete with the main three in the Internet market, they will likely remain the dominant players in the TV market for the foreseeable future.

Sales estimates by DBS Digest indicate that 5.5 million American homes get DBS service from one of the three main service providers. The number of households with service from DirecTV is 2.9 million, EchoStar has 764,000 homes, and Primestar has 1.9 million households. A "gray market" of other, smaller DBS provides accounts for approximately 267,000 households.

Because each company offers so many programming choices, we can't list them all here. (For comparison at-a-glance, see the Buyer's Guide on page XXX) For complete, up-to-date programming lists, we suggest you call companies directly, or visit their Web sites. (See Sidebar, page XXX).

Consider This

Here are some other important considerations to keep in mind when shopping for a DBS system.

Hidden or Unexpected Fees: Before you make a purchase, be sure to ask about any additional fees besides your monthly programming charge, such as additional cost to hook up a receiver for a second TV set, whether maintenance and service is included in the price and whether you want receive a monthly publication.
Installation: This is another area to watch out for. From a technical standpoint, none of these systems is difficult to set-up, but they do require mounting the DISH on a solid platform, finding an unimpeded line of site to the satellite, running coaxial cable into the house to the receiver box, and running a phone line from the receiver box to an inside phone jack. The technologically impaired might consider opting for professional installation.
Type of Interface: All of the major DBS players offer some type of on-screen menu with their programming packages. Some are more complicated than others. The main menu is the nerve center of your system and you should be happy with its features and comfortable with its operation.

Into the Future

With its increased channel options, digital signal quality and low price point, DBS is expected to continue to grow exponentially. According to information from In-Stat, a research and market information company, the worldwide market for DBS set-top boxes is expected to grow from $3.2 billion in 1997 to more than $4 billion in 1999-2000. While the U.S. and Canada have been primary targets for digital DBS set-top boxes, the launch of new satellite transmission systems is bringing DBS to markets in Europe, Latin America, the Middle East and Japan.

The challenges faced by the DBS industry, combined with the still-unknown impact DBS will have on the cable industry, are things we should all watch with a keen eye. Or better yet, a telescope.

Alice Greany is a freelance writer, editor and frequent contributor to Smart TV.

"Big Three" DBS Service Providers

EchoStar Communications Corp.
90 Inverness Circle East
P.O. Box 6552
Englewood, CO 80155
303-799-8222
www.echostar.com

DirecTV
2230 East Imperial Hwy.
El Segundo, CA 90245
310-535-5000
www.directv.com

Primestar
Three Bala Plaza West, Suite 700
Bala Cynwyd, PA 19004
1-800-PRIMESTAR
www.primestar.com

The three main players in the Direct Broadcast Satellite market are fighting a price war

Primestar

Launched in 1994, Primestar is a subscription-based DBS. Equipment is installed and maintained by Primestar as part of the subscription. The Primestar system features a menu, which allows you to restrict access to certain channels, set rating limits for individual movie purchases, place "favorite channels" at the top of the list and purchase pay-per-view movies using the remote control. The Primestar system does not have an interactive "point and click" electronic program guide, and instead features an auto scrolling EPG and a "hyper-surf" remote grouped by categories.

Hughes

Launched in 1994, DSS is a unit of Hughes Electronic Corporation. The DSS system delivers more than 175 channels of programming to locations equipped with DSS home receiving units. DSS receivers are marketed by more than a dozen major consumer electronics manufacturers. DirecTV and USSB are the DSS programming providers and the hardware is marketed by a number of consumer electronics manufacturers under licensing agreement from DSS. The DSS system is comprised of an 18-inch DISH, digital set-top decoder box and remote control. The receiver features a menu and electronic program guide that lets you point and click on a program grid with your remote to either link to a program or auto-program your VCR. You can also order pay-per-view movies, set parental controls and spending limits and customize your own list of favorites.

EchoStar

EchoStar Communications Corp. has made a fast and furious rise in the DBS arena since it launched its first DBS satellite in 1995. It just launched its third satellite in October 1997, and has been instrumental in driving the growth of the DBS market by cutting the cost of the hardware. DISH (Digital Sky Highway) Network is EchoStar's programming provider. You can either purchase, finance or lease the system, which is made up of an 18-inch DISH, remote control unit, and a TV set-top receiver box. The DISH menu allows you to set parental controls, create lists of favorite channels, auto program a VCR to record a program, watch programs in a different language and group programs by theme. The equipment can be installed by a DISH Network retailer, DISH Network's installation group, or you can do it yourself with an installation kit.

Subscriber statistics for inset chart:
DirecTV: 2.9 million subscribers
Primestar: 1.9 million subscribers
EchoStar: 895,000 subscribers
Other: 267,000 subscribers
Total DBS: 5.9 million subscribers
Source: DBS Digest