Las Vegas -- As many as 9 million consumers may purchase
new home-satellite systems next year, according to research released last week at the
Satellite Broadcasting & Communications Association convention here.
That could mean a "second wave" of new
subscribers for direct-broadcast satellite systems, which are generating good
word-of-mouth these days thanks to plunging equipment costs, researchers said.
The study was conducted by Boston-based research firm The
Yankee Group, working with the SBCA.
During the fourth quarter of 1998 and the first quarter of
1999, surveyors asked 1,000 consumers nationwide how likely they were to buy satellite
systems in the next year.
A total of 9 percent said they were likely or somewhat
likely to purchase satellite systems, which translates to millions of potential new DBS
subscribers, Yankee Group director of media and entertainment strategies Bruce Leichtman
"That's 8 million or 9 million people who are on the
fence, who are prepared to buy DBS," he added. "That's not to say they're going
to do that over the next 12 months. But it does say that there's still ripe market out
The study also found that unlike early adopters, who were
willing to spend heavily on satellite technology, today's potential subscriber is more
Today, consumers are drawn to DBS by promotional offers
that have slashed equipment and installation costs from $429 last year to $260 in 1999,
"It's a different customer now," he added.
"What we're looking at is a new consumer who is much more price-sensitive than
before, spending slightly less, and who wants to be sure that they're getting their
DBS will get an additional boost if Congress passes
legislation allowing delivery of local-into-local programming -- a pending development
that has the industry's two remaining operators, DirecTV Inc. and EchoStar Communications
Corp., at each other's throats.
SBCA president Chuck Hewitt addressed the controversy prior
to Leichtman's presentation. "We're very competitive," he said. "We're
competitive not only with cable, but with each other. Until we reach certain points of
maturity as an industry, it's going to be very, very difficult to behave and function as
The study also surveyed 1,200 DBS subscribers who owned
their systems for less than three months and 1,000 who owned their systems for more than
A total of 84 percent of new DBS subscribers would
recommend the service to a friend, while 77 percent of longer-term customers would do so.
"So it's not that they're enthusiastic at first, and
then it wears off," Leichtman said. "They're enthusiastic even after they've had
the unit for a length of time."
Programming choice remained the No. 1 reason to buy DBS
systems, with 58 percent of respondents citing channel capacity. Overall, 77 percent of
U.S. households receive some form of multichannel-video service, with cable television
capturing 65 percent versus 8 percent for DBS.
However, 27 percent of respondents considered buying DBS
systems, and 49 percent knew somebody who owned one.