DBS Companies Take No Summer Breaks

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Summertime is here, but the direct-broadcast satellite
industry has no plans to take a vacation from advertising.

The top two DBS companies, DirecTv Inc. and PrimeStar Inc.,
recently launched promotional campaigns backed by heavy consumer ad spending. And EchoStar
Communications Corp. has extended through mid-July its "Best Dish Deal Ever"
campaign.

In a joint promotion with the newly launched Toon Disney
network, DirecTv started its "Time to Get DirecTv" campaign in mid-June. Through
July 13, new subscribers who order DirecTv's "Total Choice Platinum"
programming package receive an exclusive Toon Disney watch, one free month of the Platinum
package and three programming-discount coupons good for $2.99 each.

Susan Collins, vice president of consumer marketing for
DirecTv, said the company wanted to run a family-oriented promotion during the summer
because that's when people usually spend more time together.

Summer is also typically a slow season for sales of
consumer-electronics products, including DBS. DirecTv and the other DBS companies hope
that turning up the promotional heat with steady ad campaigns will help to counter that
seasonality somewhat.

To support the Toon Disney promotion, DirecTv is spending
"several million dollars" on national print ads in publications like USA
Today
and People.

"The strategy is to differentiate ourselves,"
Collins said, adding that many cable operators don't carry Toon Disney, which will be
a digital service on most systems.

And Disney collectibles hold wide appeal, Collins said. The
face of the watch, created especially for the promotion, pops out on a spring at the touch
of a button. Retail counter cards feature the pop-out Mickey Mouse logo to help promote
the premium.

DirecTv also plans to launch an aggressive TV-ad campaign
Aug. 5 to support its National Football League package.

In July and August, PrimeStar will run broadcast and print
ads with the theme, "Hot Entertainment at Cool Prices." Highlighted by images of
summer beaches, the ads will spotlight two new promotions: its new "Value Lease"
option and its standardized national pricing.

"We're unleashing all major media," said Kim
Gordon, PrimeStar's vice president of integration marketing, including both national
and market-specific ads on TV and radio and in print.

PrimeStar -- which has always had a monthly lease option
with no upfront hardware costs, aside from the price of the installation -- has introduced
a second-lease option. Under the new plan, subscribers pay $99 down for the hardware, in
exchange for a lower monthly lease fee ($3, rather than $10).

Gordon said the new lease option was driven by suggestions
from PrimeStar dealers and customers.

With competing DBS companies offering hardware priced
almost as low as PrimeStar's $99 Value Lease payment, it seemed unclear if consumers
would want to pay an upfront cost for hardware that they would not even own.

When asked whether consumers would prefer to buy, rather
than lease, Gordon said PrimeStar allows the customer to choose. PrimeStar will also sell
a system for $199, with no monthly lease fee. But subscribers who choose either of the
lease options have access to in-house service and replacement equipment, if they need it.

Gordon said the new Value Lease program gives consumers
"the benefits of owning, without the headaches."

As part of its standardized pricing, PrimeStar has
separated its monthly equipment-use fee from its programming charges, making it easier for
consumers to compare PrimeStar's programming packages with those of the competition.

The company's "PrimeValue" package offers 73
channels for $22.99 per month, including 30 audio channels, 10 regional-weather channels
and one hometown regional-sports network.

For $29.99, PrimeStar combines the PrimeValue package with
4 feeds of Home Box Office.

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