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<TITLE>US High Power DBS Frequently Asked Questions</TITLE>
<PRE>
From owner-homesat@VM1.NODAK.EDU Wed May 25 11:29:18 1994
Date: Wed, 25 May 1994 14:17:42 GMT
Reply-To: HOMESAT - Home Satellite Technology <HOMESAT@VM1.NoDak.EDU>
Sender: HOMESAT - Home Satellite Technology <HOMESAT@VM1.NoDak.EDU>
Comments: Warning -- original Sender: tag was NETNEWS@AUVM.AMERICAN.EDU
From: Rich Peterson <rich@NCS.COM>
Organization: National Computer Systems, Inc.
Subject: US High Power DBS Frequently Asked Questions
To: Multiple recipients of list HOMESAT <HOMESAT@VM1.NoDak.EDU>
Content-Length: 41639
Status: RO
X-Status:
X-Lines: 1020
--------------------------------------------------------------
US High Power DBS Frequently Asked Questions List.
Version 14 May 25, 1994
--------------------------------------------------------------
NOTICE: This document is Copyright (C) 1993-1994, Richard R. Peterson.
All rights reserved. Permission is granted to duplicate this document
if and only if the following three conditions are met: 1. This
document cannot be modified in any way. 2. This document cannot be
sold for profit nor included as a part of any publication sold for
profit. 3.This notice must be included. Any other use requires the
written consent of the author.
DISCLAIMER: The author makes no guarantee as to the accuracy of any
information provided in this document and is not responsible for any
consequences of its use.
What is High Power DBS?
In May of 1994 Hughes Communications and the United States
Satellite Broadcasting Company (USSB) will be launching a new
generation of television service to North America. This service
will eventually allow households to receive 140-180 channels of
television programing directly from satellites on
easily-installable 18 inch satellite dishes. Programing will
include most if not all major cable services, sports, Pay Per
View (PPV) movies, and specialized "niche" programing aimed at
smaller audiences. The FCC calls this new class of television
service Direct Broadcast Satellite (DBS) and the Hughes/USSB
service will likely be the premier DBS service in the U.S. for
some time.
Here's how it works. Hughes has built two Ku-band satellites
each containing 16 120-watt transponders which will operate from
the 101 degree west longitudinal position. Hughes has sold five
of the transponders to USSB. (Actually USSB owns 5/16 of the
entire bird since federal regulations require DBS broadcasters
to own their broadcast facilities.) The two competing companies
will both offer programing receivable with a common dish and
decoder providing viewers unprecedented programing options.
The first satellite has been launched and is fully operational.
The second will be launched in the summer of 1994. These
satellites are five times more powerful than the current
generation of satellites and will be spaced 9 degrees from
others allowing interference-free reception from anywhere within
the continental U.S. and most of Canada using 18 inch diameter
satellite dishes.
The system uses digital compression to allow from four to eight
channels per transponder allowing from 140 to 180 channels,
depending on what is being shown. Many if not all channels will
have near Laser-Disc quality pictures and have the potential for
four CD-quality audio channels as well.
Hughes calls their programing service DIRECTV(TM). They have
created a subsidiary called DIRECTV Incorporated which is
managing their DBS operation.
What equipment is required and what does it cost?
DIRECTV has contracted with Thomson Consumer Electronics to
provide the decoders as well as the 18 inch antennas under the
RCA name. The hardware is called Digital Satellite System or
DSS(TM). Thomson will sell three models of DSS hardware and has
announced the suggested retail price of each model:
Basic Package $699 Allows connection to 1 TV. Only sends right
or left polarity signals into the home so
additional TVs cannot be connected.
Step-up Package $899 Includes universal remote control and
sends entire bitstream into the home. This
is required if the customer ever wants to
connect another TV or connect a computer.
2nd Decoder $549 This is required in addition to the step-up
unit to connect a 2nd TV.
The Basic and Step-up packages contain decoder, dish, remote,
and cables to connect the decoder to a TV or VCR. Additional
cables are required to connect the dish to the decoder and those
must be purchased separately.
The decoders are fully MPEG-2 compatible and fully addressable,
meaning DIRECTV and USSB can include digital codes in the
signals which authorize individual decoders to receive
particular programing. The decoders will contain many features
of high-end video products such as a parental lockout feature
and the ability of households to set a maximum dollar amount for
pay services. You will need to buy the step-up package and 2nd
decoder if you wish to watch one DSS channel and record another.
Thomson has exclusive rights to build and sell the DSS system
for 18 months or one million units, whichever comes first. Sony
has been selected as a secondary manufacturer, but will not be
allowed to sell the units until Thomson's exclusive period has
expired. Thomson and Sony will share exclusive rights for a
second six months after Thomson's exclusive period.
What programing will be available and what will it cost?
The FCC has issued USSB five programing frequencies so USSB will
program about 25 channels. DIRECTV has been issued 27
frequencies and will program about 150 channels. Each company
is free to program their channels as they like. Although they
are offering different programing, the two companies will
compete vigorously for each customer's programing subscriptions.
Programing to fill most of the channels has been announced, but
as the DSS compression technology improves, more channel space
will be available. DIRECTV and USSB are continuing to negotiate
with program providers to fill available channels.
By the fall of 1994, expectations are that he combined
DIRECTV/USSB programing breakdown will be approximately as
follows:
50 Channels of major cable services
30 Channels of sports
30 Channels of special interest/nich services
50 Channels of Pay Per View (PPV) movies
160 Total Channels
Both USSB and DIRECTV will group their programing into packages
such as a package of basic cable services, a package of NFL
games, etc. Some of the programing can be purchased a la carte;
individuals can subscribe to and pay for only what they want.
For example, it will not be necessary to buy a basic tier
package to receive HBO. Packages will be the only way to
receive some programing.
In general, pricing for the major cable services are about the
same or slightly less than cable TV companies charge for
comparable services. TVRO (big dish satellite TV) customers can
find lower priced programing subscriptions.
What programming will USSB have and what will it cost?
USSB expects to start with about 25 channels. They have landed
some of the most desirable marquee programing and because they
have far fewer channels than DIRECTV, that will make up the
majority of their programing service. They will feature HBO and
Showtime premium services and that is the foundation upon which
they are basing their business.
USSB has announced four programing packages and their prices.
Basic $8 per Month All News Channel, MTV, VH-1, Lifetime,
Nickelodeon, Comedy Central.
HBO Only $11 per Month HBO East, HBO West, HBO2 East, HBO2
West, and HBO3
Showtime Only $11 per Month Showtime East, Showtime West, and
Showtime 2
HBO Plus $25 per Month HBO East, HBO West, HBO2 East, HBO2
West, HBO3, Cinemax East, Cinemax West,
Cinemax 2, and the six basics.
Showtime Plus $24 per Month Showtime East, Showtime West,
Showtime 2, Movie Channel East, Movie
Channel West, Flix, and the six basics.
Premium Plus $35 per Month All programing from the above packages.
In addition, USSB will carry two as-yet unnamed Superstation
channels which are totally advertiser-supported so no
subscription is necessary to receive them. They have also
donated time for at least one religious channel and hope to
carry a few niche programing channels aimed at small markets.
They call their niche services MiniMass(TM). No MiniMass
services have yet been announced.
USSB's basic channels cannot be purchased separately. They do
plan to offer an as-yet unnamed package of HBO's five channels
and Showtime's three channels as stand-alone packages for $11
per month.
USSB says they will not carry any adult oriented programing.
USSB allows dealers to give away a one month subscription to its
Premium Plus package with every DSS system sold.
What programming will DIRECTV have and what will it cost?
The DIRECTV programing lineup will change dramatically after the
second satellite is operational (probably fall of 1994) so their
packages are set up to reflect that. They will likely be making
small changes to their lineup up to and perhaps beyond the
service launch date.
Their programing can be broken down into four areas: cable
programing, sports, special interest/niche services, and Pay Per
View (PPV) movies. They have not announced any free
(advertiser-supported) programing.
I. Cable Programing
DIRECTV has identified three programing packages:
A. Personal Choice 1 - $22/month
A&E CNN Headline News Encore TNT
Bloomberg C-Span ESPN TNN
Direct
Cartoon Court TV Family Channel Turner Movies
Network
CMT Discovery Channel Learning Channel USA
CNBC Disney (East) Sci-Fi Channel Weather Channel
CNN E! Entertainment TV Superstation TBS
Also included is one $3.95 PPV movie credit per month and the
DIRECTV movie preview channel. This package will be available
at the start of service expected in April of 1994. Once the
second satellite is launched, this package will no longer be
available and will be replaced with the Personal Choice 2
package which offers more flexibility.
B. Personal Choice 2 - $22/mo
With this package all viewers get the following channels:
Bloomberg Direct C-Span ESPN Turner Movies
Cartoon Network Discovery Channel Superstation TBS Trio
CNN Disney (East) TNN USA
CNN Headline News Disney (West) TNT
In addition, viewers select seven multiplex channels from Encore
OR 10 out of the more than 20 remaining services which will be
available. Choices are made from the following:
A&E E! Entertainment TV Encore: Tweens Travel Channel
CMT Encore Encore: Westerns Weather Channel
CNBC Encore: Action Family Channel (more TBA)
CNN-Intern. Encore: Drama Learning Channel
C-Span 2 Encore: Love Stories Newsworld International
Court TV Encore: Mystery Sci-Fi Channel
In addition, consumers will get 30 audio Music Choice channels
from Digital Cable Radio (described below), one $3.95 PPV movie
credit per month, and the DIRECTV preview channel. This is the
lower-priced package compared to the Total Choice package, both
of which will be available only when both satellites are
operational.
C. Total Choice - $30/mo
This package includes all cable programing available from
DIRECTV, including all basic cable channels, two Disney feeds,
seven Encore feeds, and 30 audio Music Choice channels. In
addition, customers get two $3.95 PPV movie credits per month
and the DIRECTV Preview Channel.
DIRECTV plans to offer some of its basic channels on an ala
carte basis, but have not announced which yet.
Customers can subscribe to a monthly subscription to Playboy or
can order it on an hourly or nightly Pay Per View basis.
DIRECTV will offer the Digital Cable Radio (DCR) Music Choice
service as part of its cable programing packages. This is a
commercial-free 24 hour CD-quality audio service featuring
narrowcast music in a wide range of categories. Unlike most
cable systems, this service does not require an additional
set-top box beyond the DSS decoder.
TNT may not be available everywhere for a while since Turner
Broadcasting has exclusive carriage contracts with some cable TV
companies which have not yet expired.
II. Sports
DIRECTV hopes to secure rights to major professional and college
sports events so it can offer subscribers games on a Pay Per
Subscription package or PPV basis. They can use the addressable
nature of the decoders to allow reception only in certain
geographic locations such as outside the local broadcast
coverage areas. No sports deals have yet been announced.
III. Special Interest / Niche Programming
Niche programing (programing aimed at small target markets) is
sure to be very important for DBS. Because DBS services can be
received in 100 million households, the economics just make
sense. Services which only one out of a thousand households are
willing to subscribe to still can generate over a million
dollars in annual revenue.
Few niche services have been announced to date but more are
expected in the coming months.
DIRECTV will sell a separately packaged subscription to TV ASIA
which carries Asian programing from the Indian subcontinent.
This is the first of many expected foreign language services
targeted at a specific ethnic group. TV ASIA will broadcast
about 12 hours a day and cost $6.00 per month.
DIRECTV has also signed The Physicians Television Network (PTN)
which will carry medical information and computer based
educational programing to doctors and hospitals in the U.S.
IV. Pay Per View Movies
DIRECTV calls their Pay Per View (PPV) service Direct Ticket.
They will offer 25 to 30 different PPV movies per day with the
top few each starting at intervals of at most 30 minutes.
Direct Ticket plans to broadcast the movies about the same time
they are available on cable PPV which is just after the video
store window. Prices for PPV movies will range from $1 to $4.
They have the technology to control whether or not a PPV movie
is recorded, but do not plan to use it for the first couple of
years of service.
Direct Ticket will offer PPV movies from the following studios:
Paramount Pictures, Universal Pictures, Sony Pictures
Entertainment: Columbia TriStar, Turner Broadcasting, Warner
Brothers, and the Disney owned Touchstone Pictures, Hollywood
Pictures, Miramax Films, and Walt Disney Pictures. The deal
with Turner allows them to show classic MGM movies on a PPV
basis. The deal with Disney allows them to show only the live
action films from Walt Disney Pictures.
Direct Ticket is expected to soon reach agreements with other
studios as well.
How is the equipment installed?
The DSS hardware is designed to be easy to install. The dish
can be installed indoors or out as long as there is a direct
line of sight to the South (such as through a window) with no
trees or buildings in the way. Because all DIRECTV/USSB
services are from one position in the sky and because the system
uses a circular-polarized transmission system, no professional
equipment is required to position the dish.
Homeowners can install the hardware, but Thomson does recommend
professional installation. They probably expect the average
homeowner will want to install the dish outdoors and won't want
to drill a hole through their house, run a cable through the
walls and connect it up. Thomson says the suggested retail
price of a basic installation will be $200.
Thomson will be selling an accessory product line to facilitate
self-installation. The kit carries a suggested retail price of
$70 and contains seven cables, a compass, a grounding block, a
telephone T connector, and all hardware necessary to mount the
dish and connect it up.
The decoder can display the dish elevation for any area when a
zip code is punched in. Installers level the mount, then use
the elevation scale built into the mount to set the dish angle
above the horizon. The system has a built-in audible signal
meter, so installers pan the horizon listening to the signal
strength tone to position the dish.
A telephone connection is also required. Thomson has developed
a wireless phone jack system to connect the decoder to a phone
line without running additional wiring. The system works by
transmitting telephone signals encoded as FM signals through a
home's AC electrical wiring. The Wireless Phone System retails
for $100 and can be used as an alternative to directly
connecting to a home's telephone wiring.
What inputs and outputs does the decoder have?
On the back of the decoder, there is a Satellite input
F-connector, a phone jack, audio and video input and output
jacks, an S-video output jack, RF in and out connectors, and a
channel 3/4 modulator for the RF output. In addition there is a
wideband high-speed data port on all decoder models as well as a
9600 baud two-way data port on Step-up decoder models.
There will be plenty of options for hooking the decoder into a
home A/V system. It appears, however, that there is no RGB
output connector for monitors which have an RBG input. TV sets
with S-video inputs can use the S-video output jack on the
decoder allowing the display of pure component (Y/C) video as it
was uplinked to the satellite. This will avoid the conversion
from the digital component signal to NTSC making very high
quality images possible.
What about watching the broadcast networks and local channels?
DIRECTV offers a satellite-delivered package of network stations
to customers in rural areas called PrimeTime 24. This includes
WABC (ABC-New York), WRAL (CBS-Raleigh), and WXIA (NBC-Atlanta).
They are expected to announce deals for Fox and PBS as well.
These channels will be available only to customers who are not
within the terrestrial coverage areas of network affiliates.
Those who can receive network affiliates will not be able to
purchase this package and therefore must get network programing
over the air (or by some other means).
The DSS hardware was designed with the intention of viewing
local channels over the air as well as channels from the
satellite. There is an RF antenna input on the back of the
decoder which will allow viewers to change between local and
satellite channels easily using the DSS remote control.
Research shows a significant number of customers will purchase a
DSS system and keep their cable TV and/or TVRO (big dish
satellite) system as well. This will provide a means for some
customers to receive broadcast network programing.
What is impulse Pay Per View?
Viewers will be able to subscribe to PPV services such as movies
and special event programing simply by pressing a few buttons on
the remote control. The billing information is saved in the
decoder which automatically calls the billing service center and
downloads the billing information once or twice a month.
It is expected that it will be cheaper to order PPV services
electronically than calling a toll-free phone number so
customers will likely want to use the impulse capability.
Why is the number of channels so vague?
Thomson is working with Sarnoff Labs to create a proprietary
MPEG2-based compression system whereby multiple channels can be
broadcast from a single transponder. The number of channels
which can be compressed into a single transponder depends on a
lot of things such as desired image quality (i.e. resolution),
frame rate of the source material, amount of movement in the
source material, degree of allowable visible artifacts, etc.
Programing containing frames with many fast-moving small objects
such as a basketball game can be compressed about 4 to 1 before
motion artifacts appear. Programing containing mostly large
still images (such as soap operas with their close-ups) can be
compressed at a much higher rate, perhaps 5 or 6 to 1. Movies
are filmed at 24 frames per second rather than 30 for video so
contain less source material. In addition, film is not
interlaced and is in general fairly constant from frame to
frame. As a result, film can be compressed more, perhaps 7 or 8
to 1 for near laser disc quality.
Determining what programs to combine with what others on which
transponder is going to be quite a management challenge at the
head-end, especially with special event, subscription sports,
and other infrequent programing.
For the first few months of operation, the encryption system
will use the MPEG-1 syntax rather than MPEG-2 so the number of
channels per transponder will be lower than the eventual target.
Both DIRECTV and USSB's uplink centers will be upgraded to
MPEG-2 after the services launch as the compression system is
enhanced. The decoders will be fully MPEG-2 compatible from the
start and will not need to be upgraded.
How will I find what I want to watch?
The interface for selecting a program will be menu driven from
the remote control. Users will select programs from categories,
such as movies, sports, etc. and then select from sub-menus such
as football, golf, etc. until the desired program is found. An
on-line program guide will also be included.
How are channel numbers going to be assigned?
Channels are numbered between 100 and 999. The system uses a
virtual channel assignment system meaning on any given day a
particular channel may actually reside on any one of the 32
transponders on the two satellites.
How does the conditional access system work?
The News Datacom division of Rupert Murdoch's News Corporation
is developing and managing a conditional access and encryption
system for the DSS system. The decoder accepts a credit-card
sized processor board called a SmartCard which plugs into the
front and allows the decoder to receive authorized programing.
The authorization stream is sent on each transponder along with
the video and audio information. The SmartCard will be very
difficult to reverse-engineer, and can be inexpensively and
easily replaced by the owner if necessary.
What about High Definition TV?
There is little doubt that the DIRECTV/USSB DBS service will be
the first means in which most Americans have access to broadcast
High Definition Television programing. Terrestrial broadcasters
are balking at the investment necessary to move to terrestrial
HDTV which will still leave them with one channel in an
increasingly multi-channel world. DBS will no doubt prove to be
the most cost-effective means of delivering HDTV to homes in the
U.S. for years to come. Each DSS decoder contains a high-speed
data port which RCA intends to use to connect an HDTV decoder
when they are available.
Significant HDTV broadcasts will likely be many years away. In
the near term, however, it is expected that widescreen NTSC
broadcasts will be available on at least part of the
DIRECTV/USSB service.
What is widescreen NTSC?
The DSS system is capable of broadcasting 16:9 screen ratio
video to widescreen sets such as RCA's CinemaScreen TVs. Sony's
latest professional digital video equipment can store an
enhanced 525-line widescreen image in a format they call 525
Widescreen. Movies are filmed (and therefore archived) in
widescreen formats as well. There is a lot of widescreen source
video available, and it is expected that DIRECTV and possibly
USSB will do some widescreen broadcasts.
The DSS system will process and broadcast component video
signals allowing video recorded in widescreen component formats
such as Sony's 525 Widescreen to be passed straight through to
16:9 widescreen sets without ever being processed as NTSC video.
The results of this are said to be of very high quality and
could be a short-term substitute for HDTV.
What other services will be available?
The potential for data services are perhaps the most exciting
aspect of the DIRECTV/USSB service. Because the DSS signal is a
digital packet-based system, it can send video, audio, and
computer data in any combination to the decoder. Some, if not
all of the decoders will contain a high-speed data port (as well
as possibly a lower-speed RS232 port) which can be connected to
a computer. The 24 MHz bandwidth of each transponder can send
an enormous amount of information (22 MBits of data per second).
The applications of this are difficult to imagine.
Picture, for example, the (imaginary) hotel channel, which is
not really a TV channel at all but instead is a circular data
services channel capable of downloading room availability and
pricing of participating hotels around the country. Travelers
enter a command at their computer which instructs it to watch
for all hotels in a particular city with availability on a
particular date in a particular price range. After some time
the computer reports back on all appropriate hotels showing a
full-motion video picture of the hotel, its rooms, restaurants,
and even a short video sequence showing the entertainment
planned for the lounge with stereo sound. All this is possible
with the DIRECTV/USSB DBS service.
Will DSS hardware prices drop in the near future?
USSB says the price of the DSS hardware will drop significantly,
perhaps to half the initial price within a couple of years after
its introduction. Others are not so optimistic.
The wholesale prices will be fixed by Thomson for the first 18
months or 1 million units, whichever comes first. After that
time, Sony and Thomson will share exclusivity for another 6
months. At the time Sony is allowed to enter the market, they
will compete head-to-head with Thomson on both price and
features. This is expected to quickly drive the prices down.
Sony says they will have product ready to sell whenever their
marketing window opens. Most experts believe this will be
before Thomson's 18 month exclusive period has expired.
After the two exclusive periods expire, additional manufacturers
will be allowed to enter the market increasing competition for
price and features.
What other companies are involved in this DBS service?
The following companies are involved in this DBS service beyond
DIRECTV and USSB:
Thomson Consumer Building the RCA receiver and dish and supplying
Electronics compression technology.
News Datacom Providing conditional access system.
Arianespace Launched first satellite (DBS-1)
General Dynamics Launching second satellite (DBS-2)
Sony Supplying digital equipment for DirecTv's and USSB's
broadcast centers
DEC Operating DirecTv's national billing center
Matrixx Marketing Providing telephone marketing and customer
service for DirecTv
DBS Systems Corp Providing advanced billing software for DirecTv
NRTC Providing rural sales distribution for DirecTv
JC Penny Providing billing and customer service for USSB
Where are the uplinks located?
DIRECTV has constructed a state-of-the-art all digital facility
in Castle Rock, Colorado where they will uplink all programing
to the DIRECTV satellite. The center includes eight receiving
stations and four 13-meter uplink dishes. Programing will be
provided to the uplink facility via satellite, over fiber optic
cable, and through the use of digital tape.
Equipment going into DIRECTV's broadcast center will include
more than 300 Sony digital Betacam video recorders, a digital
routing system that includes more than 800 inputs and outputs,
and 50 automated playback and recording systems.
USSB has built a new 20,000+ square foot all-digital uplink
facility in Oakdale, Minnesota which is near Saint Paul. They
call it the National Broadcast Center. They are using two
9-meter Ka-band dishes and multiple C and Ku-band downlinks. The
uplink dishes in USSB's facility are inside a specially
constructed microwave-transparent atrium which shields them from
exposure to the weather.
If DIRECTV and USSB are different services, will I get two bills?
Probably, depending on what services you subscribe to. It is
possible that other services provided through other companies
will require their own billing, as well.
I live in the city where there are tall buildings. Can I
receive the DIRECTV/USSB DBS service?
You must have a direct view of the satellite to get this service.
I live in an area that receives lots of rain. Will I lose my
signal during rainstorms?
The satellites are focused to send more power to rainier areas
to help minimize this problem, but the service may be
temporarily lost during heavy rains. DIRECTV claims the signal
will be receivable 99.7% of the time everywhere within the
coverage area. A very heavy thunderstorm directly above one of
the uplink centers may temporarily disrupt service as well. The
uplink facilities have numerous safeguards to reduce the chances
of weather related service disruptions.
Where in the sky will the satellites be?
The two satellites will operate from 22,300 miles above the
equator at the 101 degree West orbital location. This is above
a North/South line running through western Kansas. Viewers in
the central portion of the U.S. (such as Texas or North Dakota)
will see the satellite about straight to the south. On the East
coast it will be slightly west of south and on the West coast it
will be slightly east of south.
The angle above the horizon depends on the distance north of the
equator. Those in the northern part of the U.S. (such as
Minnesota) will see it about 38 degrees above the horizon. Those
in the southern part will see it much higher in the sky.
Can you tell me more about the satellites and DSS system?
The two satellitesare called DBS-1 and DBS-2. Each has 16
transponders powered by 120-watt traveling-wave tube amplifiers
(TWTAs) suitable for both digital and analog transmissions.
They will operate in the BSS portion of the Ku-band spectrum
(12.2-12.7 GHz) and use circular polarization. They can deliver
58 to 53 dBW radiated power over the contiguous U.S. and
southern Canada.
Each spacecraft weighs 3800 pounds and measures 7.1 meters
across and 26 meters long with antennas and solar panels
deployed. The solar panels generate 4300 watts of electrical
power.
The DSS system uses a Quadrature Phase Shift Key (QPSK)
modulation. The audio is MPEG-1 Layer II standard Dolby
Pro-logic encoded. The video will eventually be MPEG-2 with up
to CCIR 601-1 sampling rates which allows up to 704 x 480 images.
Each transponder outputs 22 MBits/second of information. The
system uses a statistical multi-program encoder that varies the
bit rate according to video content taking into consideration
other programs multiplexed on the same transponder.
Can I use my existing TVRO system for DSS?
Not directly. If you have Ku Band capability, you may be able
to use your existing dish but you must purchase a DSS decoder.
DSS uses a circular polarized LNB which probably would need to
be replaced as well. Thomson is discouraging the use of
existing TVRO systems with DSS.
What are the marketing projections for this DBS service?
DIRECTV and USSB forecast 1 million units sold the first year
and 10 to 12 million within six years. USSB says that is
conservative and they have suggested the possibility of selling
50 million units (about half the households in the U.S.) by the
turn of the century.
It will be quite a challenge for RCA and their sub-contractors
to produce enough decoders and dishes fast enough to meet the
projections. However, Thomson believes they have the capacity
to produce 700,000 receivers by the end of 1994 which is in line
with DIRECTV's forecasts.
Thomson considers their first generation DSS decoder the largest
first-year introduction of a consumer electronics product in the
history of the business. They are building a manufacturing line
in Mexico which will allow them to assemble 120,000 units per
month which is about 4000 units per day.
DIRECTV believes it will break even in its second year of
operation when they expect to have 3 million subscribers.
The market plan is to first concentrate on the 10 million or so
rural homes which do not have access to cable TV and then move
to more populated urban areas as the cost of the equipment goes
down. Both USSB and DIRECTV plan to compete with cable and the
phone companies by stressing higher quality pictures and sound
at a lower price.
DIRECTV is planning a $40-$50 million consumer advertising
campaign launched in the fall of 1994 when adequate DSS hardware
is available.
The U.S. Commerce Department has released a study saying DBS
will have an enormous impact on the domestic satellite services
market. They point out that nearly all new domestic transponder
capacity is dedicated to DBS.
Where will I buy my hardware and programing?
DSS hardware will be sold through both TVRO dealers and consumer
electronics retailers. Thomson has announced deals with Best
Buy, Circuit City, Sears and Wards Electric Avenue to sell the
DSS hardware. They also will sell it at other RCA dealers
nationwide. DIRECTV says they expect to have 8000 retailers by
the end of 1995. Thomson requires a trained sales force to sell
the DSS hardware so some major retailers such as WalMart and
K-Mart will not qualify to sell the system.
Although the majority of hardware sales will likely come from
consumer electronics retailers, they will probably contract with
TVRO dealers and installers for the installation services.
Any retailer authorized to sell DSS equipment is also allowed by
both DIRECTV and USSB to sell their programing subscriptions (if
they choose to). This means customers can buy hardware and
programing subscriptions together at one retail outlet.
In April of 1992 DIRECTV agreed to provide the National Rural
Telecommunications Cooperative (NRTC) the exclusive rights to
distribute 20 top cable and broadcast services to six million of
their rural customers. They will market DIRECTV through rural
electric cooperatives and telephone firms. They plan to
purchase equipment from Thomson and lease it to their customers,
thereby removing the large initial hardware purchase burden from
their subscribers.
What about other high power DBS services?
The FCC has set aside eight orbital positions at the equator for
U.S.-owned DBS satellites of which four are to provide service
over the east coast and four over the west. At each of these
slots the FCC is permitting a maximum of 32 transponders. The
FCC assigns DBS frequencies to applicants in a way that gives
them an equal number of orbital positions from east coast
satellites and west coast satellites. The idea is that each
company can provide service to the entire continental U.S. by
broadcasting from both their east and west birds.
However, with today's technology, three of the four eastern
positions (101 degrees, 110 degrees, and 119 degrees) are at
longitudes which can actually provide coverage to the entire
continental U.S. These are the most desirable slots and
companies assigned these locations are the only ones who have
announced plans to begin a service. Note that companies at
these slots also have licenses for west coast only slots which
at this time they apparently are not planning to operate from.
The DIRECTV/USSB DBS service will operate from what all experts
agree is the best orbital position (101 degrees).
The U.S. Commerce Department has released a study saying as many
as 12 DBS satellites are scheduled for launch between now and
1996.
Echosphere's EchoStar division is now in the process of building
satellites which will provide service at the 119 degree orbital
position where they hold a license for 11 frequencies. They
have reached an agreement with DirectSat to combine their
licenses giving them control of 21 frequencies. They have
contracted with China Great Wall Industry Corp. to launch the
first of their Martin Marietta developed satellites in July of
1995. They hope to be operational by late in 1995 or early in
1996.
EchoStar has discussed several possibilities for their DBS
service. Originally, they said they were planning a system
which was complementary to the DIRECTV/USSB DBS service by
offering additional niche and targeted market services. This
would require them to use the same DSS hardware with a motorized
dish to allow movement between the two DBS positions. More
recently they have proposed a competing system offering lower
equipment and subscription prices. They have not yet announced
a decision whether or not to be compatible with DSS and it is
not clear whether or not DIRECTV will license the DSS technology
to them. It is interesting that Echosphere is one of five
exclusive DSS distributors selected by Thomson Consumer
Electronics.
The Tempo division of cable giant TCI is building two satellites
capable of high-power DBS which they will use to broadcast from
their 119 degree position where they hold a license for 11
frequencies. They have not announced any plans to combine with
the EchoStar service offered from the same orbital position.
Another company, Advanced Communications, is also in the process
of building satellites which they hope to launch in the fall of
1996. Their service will operate from the 110 degree orbital
slot where they own 27 frequencies.
The remaining DBS licensees include Continental Satellite Corp
and Direct Broadcast Satellite Corp.
Most experts believe business alliances, consolidations, and
buyouts will continue to occur among the DBS permittees.
Since DIRECTV and USSB will have most if not all major cable
programing as well as plenty of room for sports, PPV movies,
niche programing, and others, it is difficult to imagine how
other services will be able to capture a significant number of
households. On the other hand, it won't take a large percentage
of households to make a profitable business if you consider the
expected break-even point for both DIRECTV and USSB is only
about 3% of all households or 3 million subscribers.
Some experts think the DBS services from the orbital positions
which cannot cover the entire continental U.S. will be primarily
limited to business communications and other technologies such
as computer services.
Is the DIRECTV/USSB DBS service really going to happen?
Yes. The companies involved in the service have already either
spent or committed over $1 billion on the operation and the
first satellite has already been delivered into orbit and is
fully operational.
DIRECTV and USSB said they would start service in spring of
1994. Why haven't they?
Thomson, DIRECTV, and USSB are working hard to launch the
services in June of 1994. They have already slipped several
weeks from their original target but appear very close to
launching. There are many reasons for the dealy and as expected
they are mostly computer software related.
DIRECTV says they have had numerous software problems in the
encoders, decoders, the authorization and billing systems and
other areas. In addition, they decided to make some last minute
changes to the software in the decoders after getting feedback
from some of the early users. Engineers from all companies
involved are working very hard to finalize the system.
The DSS system is the first widespread use of an MPEG based
compression system. This is a very complex system with a lot
of computer hardware and software which must to be very robust
and error-free. In addition, it uses a complex conditional
access system using data extracted from what will eventually be
millions of units across the country. It will no doubt take time
before DIRECTV, USSB, Thomson, CLI, DEC, JCPenney, and all of
the other companies involved are able to make everything work
perfectly.
Where will the service initially be available?
Once launched, the service will initially be available only in
five markets who will aid in testing and helping debug the
overall systems. They will gradually expand into additional
markets throughout the first few months of operation. They
expect to supply retailers throughout the U.S. with DSS
equipment by about September of 1994.
The first five markets are Little Rock, Arkansas; Shreveport,
Louisiana; Jackson, Mississippi; Albuquerque, New Mexico; and
Tulsa, Oklahoma. Other markets expected to follow are
Indianapolis, Indiana; Charlott, North Carolina; Columbia, South
Carolina, Knoxville, Tennessee; Roanoke, Virginia; and
Charlestown, West Virginia. They will choose an initial startup
city (probably Jackson) and add a new city every couple of days
until all of the initial markets have been covered.
DIRECTV and USSB say customers are welcome to travel to one of
the initial markets and purchase the DSS hardware.
The second satellite is scheduled for launch in the summer of
1994. DIRECTV's complete service won't be available until after
both satellites are fully operational.
Thomson is predicting major shortages of the reception equipment
throughout most of 1994. They expect to be able to meet demand
in early 1995.
Where can I get more information?
You can get more information using the following phone numbers:
DirecTv Consumer Information 1-800-539-8484 (or 310-607-4511)
DirecTv Dealer Information 1-800-323-1994
DirecTv General Information 1-800-DIRECTV
USSB Consumer Hotline 1-800-204-USSB
USSB Dealer Hotline 1-800-898-USSB
RCA DSS Information 1-800-898-4DSS
--
Richard R. Peterson, President Phone: 612-773-8652
The DBS Connection Voice mail: 612-683-6151
1480 Lark Avenue, Maplewood, MN 55109 Fax: 612-683-2643
Available for contract. Internet: rich@ncs.com
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