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TK's MORNING BUZZ: Video Can Only Benefit From Analysts' Warnings That the EchoStar-Hughes Satellite Merger Would Be a Bad Deal for Consumers

30 Oct, 2001 By: Thomas K. Arnold

Let's watch the competition self-destruct. Wishful thinking? Maybe -- but maybe not.

No sooner had reports surfaced that two of the largest providers of satelliteTV, EchoStar and Hughes, announced their intention to merge, than analysts inmyriad press interviews blasted the proposed deal as bad for consumers.

"Consumers are likely to pay much higher prices for fewer television channels if regulators permit the planned merger of two of the largest providers of satellite TV, consumer advocates said Monday," noted the Reuters news service.

"We are losing competition and some diversity," Jeff Chester, executive director of the Washington-based Center for Digital Democracy, was quoted as saying. "Now (consumers and competitors) will have to go through a celestial gatekeeper who will decide what the prices and terms will be for bothprogrammers and content providers."

Pardon me, but I'm not about to shed any tears. And should analysts' warnings come true and satellite subscribers think twice about renewing, our industry can only benefit.

Going back a few years, the launch of direct-broadcast satellite took a big hit on the video industry. Satellite rolled out of the gate with something like 5 million viewers, and right away studies showed that satellitesubscribers sharply curtailed their video rental activity.

Fortunately, satellite's growth slowed after that initial burst, while thevideo industry found strength in DVD. Satellite's inability to offer true video-on-demand -- the DBS industry isn't even a contender in a battle that's largely between cable and the Internet -- further softened its blow.

But a lot of damage was done, and if I were a lesser man I'd be cheering right now at the prospect of satellite potentially being done in by its own greed.

Aw, the heck with it. GRIN GRIN GRIN GRIN GRIN.

Comments? Contact TK directly at:TKArnold@aol.com

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