Band of Brothers

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Well before it sold its first dish under the Digital Satellite System brand name in June 1994, DirecTV had a built-in cheerleading squad — thousands of consumer electronics and satellite television retailers eager to spread the news of the hot new technology.

CE retailers longed for a new gizmo to attract customers. VCR and the microwave oven sales had peaked in the 1980s, and the days of the low-cost PC hadn’t quite arrived. When the DSS team from DirecTV Inc., U.S. Satellite Broadcasting and Thomson Consumer Electronics began talking up their product at trade shows more than two years before the service launch, their audiences were spellbound.

According to retailer Con Maloney, chairman of Jackson, Miss.-based Cowboy Maloney’s Electric City, the industry was abuzz wondering who would make the first DSS sale. “We knew months ahead of time” that Cowboy Maloney would hold that honor, Maloney says, “but we were not in a position to say it was us.”

Such enthusiasm was crucial to the DirecTV launch. “In the beginning, retail was very important, because people had to see DirecTV to understand it,” says Glen Friedman, who was DirecTV vice president of consumer marketing at the 1994 launch and is now president of Los Angeles-based ITV consultant firm Ideas & Solutions Inc.

Consumer electronics dealers did a good job of creating awareness not just for DSS hardware, but also the programming. “The consumer electronics industry spends rather significant amounts of money on consumer marketing,” Home Box Office executive vice president Bob Zitter says. “There were full-page ads all the time branding HBO and its multiplex feeds.”

DirecTV would quickly come to count on the largest consumer electronics chains — RadioShack, Best Buy, Sears and Circuit City — to help promote its service. But Cowboy Maloney’s was a regional retailer, and it could react more quickly to DirecTV’s uncertain launch date.

“It’s hard for a national player to turn on a dime,” Maloney says.

COWBOY’S JAMBOREE

The June 17, 1994, launch at Cowboy Maloney’s was treated as a grand event, complete with tuxedo-clad sales associates and representatives from DirecTV, USSB and Thomson Consumer Electronics. Even with little notice, customers were lined across the parking lot before the store opened.

According to Tellus Venture Associates president Steve Blum, some customers in line on opening day were waiting for free giveaways of stuffed Nipper and Chipper dogs, the RCA mascots that were ubiquitous during the launch. Consumer marketing manager for USSB in 1994, Blum was on hand in Jackson to help sell the first few hundred DSS dishes.

“People had flown in just to get their own box,” Blum says. “It was supposed to be a soft launch. It was the worst-kept secret in the industry.”

The national product launch would wait another three months, giving Thomson time to make enough equipment to stock nearly 15,000 stores around the country.

Cowboy Maloney’s is still touting its relationship with DirecTV. It hosted a 10-year anniversary celebration June 17. Even the mayor of Jackson, Miss., got in the spirit by proclaiming the date DirecTV Day in the city.

HEIL’S BROADCAST BOOST

Another key retailer in DirecTV’s annals is Fairview Heights, Ill.-based Heil Sound Ltd. When its president, Bob Heil, learned in 1991 of DirecTV’s plans to launch later in the decade, he decided to sell his C-band satellite retail business and wait for the next-generation satellite technology. In the meantime, he drove consumer demand for DirecTV through his own weekly radio broadcasts.

Thomson rewarded Heil with generous access to hardware in 1994, when DSS product was scarce. “We sold thousands” of receivers in the first few months, Heil says, including one to Bob Costas, then a local broadcast star.

“The biggest selling point for consumers was they could get rid of cable, and they didn’t need a big C-band dish,” Heil says.

In the early days when a DSS system cost consumers $1,000 or more, “we were able to sell them and make some money,” Heil says. “Now you can’t make any money.”

While some retailers have added competing technology from cable or EchoStar Communications Corp.’s Dish Network, Heil says he couldn’t turn on DirecTV after its early support of his sales efforts. Cowboy Maloney’s, too, has remained loyal to DirecTV. “They have the NFL exclusive,” Maloney says.

Greg Frasca, president of SkyWeb Inc. in Tinton Falls, N.J., says DirecTV has a stronghold on commercial sales to bars and restaurants because of its exclusive NFL package.

On the residential side, SkyWeb has sold Dish Network since its launch in 1996, in large part because of its international programming. “In the New York/New Jersey metropolitan area, you can imagine the melting pot of customers we service,” Frasca says.

In 1993, the launch team warned independent satellite dealers that they risked being pushed aside by high-volume retailers, says Buddy Davis, CEO of Davis Antenna Inc. in suburban Washington, D.C. A decade later, Davis boasted that 65% of recent DirecTV subscriber additions came from independent retailers. “The purchase requires a tremendous amount of customer handholding, and then you need to have it installed and integrated with other products in the home,” Davis says.

And while consumers today are more aware of DirecTV than they were 10 years ago, most still need to be educated on the latest technologies.

“No one wants a DVR until you put them in front of one,” Davis says. “They’re products that require salesmanship, and no one is better at maximizing that position than the independent satellite dealer.”

During the 1994 DSS launch, Davis served as chairman of the Satellite Broadcasting & Communications Association retail council. He holds a “DirecTV Superman” award for help with the launch. According to Davis, he also installed the third DirecTV system in America, one that’s still operational at 1600 Pennsylvania Avenue.

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