Accents on HDTV at Satellite Show

7/26/1998 8:00 PM Eastern

Nashville, Tenn. -- On the heels of record first-half
sales, the direct-broadcast satellite industry put its high-definition television plans in
the spotlight at its semiannual show here last week.

Several exhibitors at the Satellite Broadcasting &
Communications Association conference -- including Home Box Office, EchoStar
Communications Corp. and PrimeStar Inc. -- displayed HDTV, indicating the direction that
the DBS industry plans to take with the new technology.

HBO technology vice president Bob Zitter told reporters
that the premium-movie service will launch two HDTV channels -- duplicating programming on
its main East and West Coast feeds -- early next year.

About 70 percent of the programming on those two channels
is expected to be delivered in HDTV each day initially, Zitter said. That's
significantly more high-definition programming than the broadcast networks are likely to
air in the early days of digital broadcasting.

"You can't convince a consumer to spend $5,000
for a [high-definition] TV set to watch one hour of HDTV on CBS per night," Zitter

HBO's initial HDTV programming will include any
theatrical or original movies that are available on 35-millimeter film. All of those
movies will be transferred from film to high-definition videotape, which will be delivered
in the 1080-interlace (1080i) picture format. The other 30 percent that's not
available in a high-definition format will be upconverted to take advantage of the new
digital televisions' display capabilities.

Zitter said HBO would be willing to talk to any DBS or
cable distributors that wanted to deliver its HDTV feeds in other formats. However, HBO
would not consider the lower-resolution 480p (progressive-scan) format as an option for
high-definition distribution.

"I hope that all of the format wars that have come out
in the press don't bleed over to the consumer press," Zitter said.
"Consumers don't care about things like interlace versus progressive."

Showtime Networks Inc. expects to announce its plans for
HDTV within the next month, said Gene Falk, its senior vice president and general manager
of direct-to-home services.

Each of the three DBS platforms indicated that it is likely
to deliver HBO's HDTV feeds, although none announced official timelines or signed

EchoStar is already uplinking an HDTV feed featuring HBO
promotional materials, although the company has not yet introduced receivers that will
handle the signals.

EchoStar chairman and CEO Charlie Ergen said the company
will likely carry HBO's HDTV feeds early next year on its EchoStar III and IV
satellites, at 61.5 degrees west longitude and 148 degrees west, respectively. Customers
would need a second dish to receive HDTV signals plus traditional Dish Network fare.

U.S. Satellite Broadcasting president and CEO Stanley E.
Hubbard said USSB is close to a deal with DirecTv Inc. that would allow USSB to bring
HBO's HDTV feeds to the new DSS-2 platform on the Galaxy III-R satellite. Current
Digital Satellite System owners would need new receivers and larger dishes to access the
HDTV feeds. Hubbard said he would disclose USSB's HDTV plans soon.

DirecTv intends to have its own HDTV feed on Galaxy III-R
sometime late this year for use in retail showrooms. Company president Eddy Hartenstein
said DirecTv will look at launching pay-per-view HDTV channels for consumer use early next
year, once HDTV sets have made their way into homes.

PrimeStar plans to make a high-definition feed available to
its dealer base sometime this fall, executives said. The biggest question for PrimeStar is
whether that feed will be on its current medium-power service, or on a new, high-power DBS

PrimeStar president Dan O'Brien said that while the
company is testing HDTV at medium power, it would prefer to go straight to high power with
HDTV because it would be costly to buy high-definition equipment for two services.

PrimeStar's high-power fate is still up in the air,
pending a possible restructuring of the company's ownership to appease the U.S.
Department of Justice. The DOJ filed a suit to block PrimeStar's merger with American
Sky Broadcasting Inc., which controls 28 high-power transponders at 110 degrees west

"The Department of Justice has been very clear that
cable ownership will be a problem," said Carl Vogel, PrimeStar's recently
appointed chairman and CEO.

Vogel declined to give details on the state of negotiations
with potential equity partners that would allow PrimeStar's cable owners to sell down
their stakes in the company, other than to say that there's been significant

Vogel did say that PrimeStar's owners are not likely
to be pressured into a panic sale.

"Some would like to bottom-fish us," Vogel said.
"We're not really interested in being bottom-fished."

In other news at the show, the SBCA and the Consumer
Electronics Manufacturers Association have agreed to endorse a new industrywide consumer
Web site, with the working title "" The site, expected to launch
in October, is being created to help deal with the "deer-in-the-headlights
syndrome," in which consumers delay buying a satellite system because they're
overwhelmed with the number of choices, said Gary Shapiro, president of the CEMA.

And while the Web site will be designed to be
platform-neutral among the various DBS providers, "we're never neutral when it
comes to cable," SBCA president Chuck Hewitt said.

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