DBS Sales Simmer Throughout Summer


The direct-broadcast satellite industry posted a strong
August, continuing this year's trend of moving away from the typical dip in sales over the
summer months.

Buoyed by an aggressive "NFL Sunday Ticket"
promotional campaign, market-leader DirecTv Inc. signed up 101,000 net subscribers last
month, its strongest August to date. The acquisitions bring DirecTv's subscriber count to
3,937,000, meaning that the company is poised to reach the landmark 4 million total soon,
if it didn't already do so this past weekend.

Hampered by a lack of government approval to move to
high-power DBS, second-place competitor PrimeStar Inc. has just over one-half the
subscriber base of DirecTv, with 2.156 million at the end of August. During the month,
PrimeStar netted 22,400 new subscribers.

One DBS analyst noted that with PrimeStar's high churn, it
likely signed up a considerably higher number of customers than that figure just to
replace those who disconnected.

EchoStar Communications Corp., which came to market two
years behind DirecTv and PrimeStar, showed a total of 1.528 million subscribers at the end
of August, after signing up 73,000 new customers for the month.

Bob Marsocci, a spokesman for DirecTv, said the company's
strong August numbers reflect a momentum that's been building all year. He added that
word-of-mouth is feeding that momentum.

"With every new subscriber that we get, word-of-mouth
spreads," he said.

Although PrimeStar's numbers are higher than they've been
for months, Dan O'Brien, its president and chief operating officer, said, "I don't
think that I could ever say that I'm satisfied with the numbers. We really need to focus
completely on churn."

Because PrimeStar has such a low cost of entry --
especially with its current discounted installation promotions -- it's easier for
subscribers to leave PrimeStar for other services, O'Brien said.

PrimeStar's early acquisition numbers for September
"are outstanding," O'Brien added.

The last months of the year typically generate the highest
number of sales for each of the DBS players, fueled by sports, the new television season
and holiday promotions.

"It's starting to look like this could be a seriously
good fall," said Steve Blum, president of California-based Tellus Ventures
Associates. "If you have a kick-butt fall, that'll get everybody
bgcolor="#FFFFFF"'s attention."

Blum said a good fall could help to place investors' focus back on strong subscriber
growth for the DBS industry and away from the slew of recent technical failures that the
satellite industry has faced, affecting both launches and in-orbit birds.