News

Dish Network Adds Channels, Defends Price Hikes

3/15/1998 7:00 PM Eastern

EchoStar Communications Corp. added eight new channels to
its upper-tier programming package last week and announced a $2-per-month price increase
effective May 1.

The new channels are: American Movie Classics, Romance
Classics, Bravo, The Independent Film Channel, MSNBC, CBS Eye on People and Classic Sports
Network. Toon Disney will be added once the new network is launched.

Starting April 1, the Dish Network "America's Top
60 CD" package will replace the "Top 50 CD" package, which had sold for
$26.99 per month. Current Top 50 subscribers can preview the new channels free throughout
April.

EchoStar is also taking three superstations from the
step-up package and moving them into a $4.99 stand-alone package. The "Superstation
Package" includes WPIX, WSBK, WTLA and WWOR. Both WTBS and WGN remain in the Top 60
CD package. Subscribers can choose a single superstation for $1.50 per month.

Consumers who pay for their programming annually will not
face an increase until their contract is up for renewal. But Top 50 subscribers must
choose between the superstations or upgrading to the Top 60 package without the newly
segregated superstations.

In his monthly "Charlie Chat" with subscribers
last Monday, EchoStar chairman and CEO Charlie Ergen said he removed the superstations to
avoid raising the price of the popular package above $30 per month.

Programming costs for superstations and broadcast-network
stations have gone up for direct-broadcast satellite companies due to government-imposed
copyright-fee increases that took effect at the beginning of the year.

"Our competition raised their fees in January,"
Ergen told subscribers. "We wanted to make sure that we gave you plenty of
notice."

Dish Network president John Reardon asked subscribers to
voice their opposition to copyright-fee increases in Washington, D.C. In a separate chat
with Dish Network retailers Wednesday, he asked dealers to contact their Congressmen, too.

Ergen promised to roll back prices on network and
superstation programming if Congress gives the DBS industry a reprieve on copyright fees.

"This is the first time that we've ever raised
programming prices," Ergen said, "and it's a result of adding channels and
increased copyright costs. I would hope that we're not like cable, where we have to
raise our prices every year."

"We haven't had any feedback that this has been
perceived as a price increase," Reardon said three days after the new package was
unveiled. "We've added eight quality channels for $2."

Steve Blum, president of California-based Tellus Venture
Associates, doesn't think that the price increase should hurt EchoStar in
subscribers' eyes. "If they were raising the price of their lead package, that
would hurt them," Blum said.

Dish Network's "America's Top 40"
package still sells for $19.99 per month.

Subscribers who take broadcast-network feeds from both the
East and West coasts will see the price increased to $7.99.

EchoStar also announced last week that it is adding two new
premium-movie channels, Starz!2 and Showtime Extreme. The company is raising the price of
each of its four multiplex premium services by $1 per month, to $10.99, with discounts for
additional premium packages.

The Top 60 CD package offers one regional-sports channel.
Top 60 subscribers can add a 21-channel regional-sports package for $4.99 per month.
EchoStar added six new regional-sports channels when it signed a deal with Rainbow Media
Holdings Inc.

The Rainbow deal also brought AMC to Dish Network. Reardon
said AMC was the most-asked-for channel that Dish Network didn't yet carry.

Topping that most-requested list now are Encore! Westerns
and Speedvision.

Dish Network is expected to announce these and other
additions after it adds bandwidth following the launch of a fourth satellite later this
year. If granted approval by the Federal Communications Commission, EchoStar will replace
a satellite at the 119 degrees west longitude spectrum with a more powerful satellite, and
it will move the original satellite to a new orbital slot at 148 degrees.

To help raise per-subscriber revenues, Reardon expects to
introduce a third programming package in August.

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