Survey: DBS Must Target Cabled Areas

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Direct-broadcast satellite companies must do a better job
of targeting cable customers if they are to continue boosting their subscriber counts,
according to a survey of people in nearly 2,000 homes.

At the same time, said Bruce Leichtman, director of The
Yankee Group's Media and Entertainment Strategies Group, which released the results of the
survey late last month, DBS should play up its own strengths, rather than just positioning
itself as an alternative to cable.

Nearly 50 percent of consumers who said they were unlikely
to choose DBS in the next 12 months gave 'Because I don't need one' as the
primary reason.

The Yankee Group interviewed people through a random sample
in 1,900 homes between August and October.

'Rather than battling among themselves for market
share, the DBS players need to clarify and articulate their strengths in all areas of
programming and reception in order to give the next group of prospects a reason to buy
their product,' Leichtman said.

Over 54 percent of DBS owners in the survey said they had
no access to cable, indicating that early adopters of DBS have come in large numbers from
rural populations.

While Leichtman predicted that there's still enough room in
rural areas to add another 3 million subscribers, that market alone won't help DBS
companies to get to the break-even point.

DBS companies 'clearly have to get into the 92 million
homes with access to cable,' he said.

To do so, Leichtman recommended that DBS focus on such
strengths as greater number of pay-per-view channels and multichannel premium lineups.

Movies are among the most frequently mentioned reasons for
choosing DBS, according to the survey. Over 54 percent of DBS subscribers mentioned
greater movie selection as a reason for subscribing to DBS.

Technology itself scored big: 55.8 percent of DBS
subscribers cited 'clearer picture' as a reason for buying DBS.

Price was seen as both a pro and a con by different
respondents. Of those who do subscribe to DBS, 23.4 percent thought that cable was too
expensive. Of non-DBS subscribers, 20 percent thought that DBS was too pricey.

Nearly one-half of DBS subscribers surveyed with access to
cable said they chose DBS because they were dissatisfied with their cable operator.

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