ValueVision Gets DBS Carriage

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In the first fruits of its affiliate-relations tie-in with
NBC, home shopping network ValueVision International Inc. signed carriage deals with
leading direct-broadcast satellite providers DirecTV Inc. and EchoStar Communications
Corp.

DirecTV's 5.1 million subscribers -- which will grow
as it assimilates former PrimeStar Inc. subscribers -- and EchoStar's 2.4 million
Dish Network customers would swell ValueVision's base from about 15 million to more
than 23 million.

NBC and sister company GE Capital Services bought a 19.9
percent stake in

ValueVision earlier this year, and NBC Cable took over
cable-distribution and affiliate-relations oversight for the network, which is a distant
third in the home shopping sector behind QVC and Home Shopping Network.

Last Wednesday, after ValueVision's share price rose
$3 (15 percent) on news of the DBS deals, the General Electric Co. units said they had
increased their stake to 39.9 percent by exercising warrants and buying $175 million worth
of stock.

The original 19.9 percent stake, bought in two chunks, cost
$44 million. ValueVision stock traded for about $10 before the NBC deal in March.

NBC president of cable distribution David Zaslav noted last
week that with the two DBS deals, ValueVision had increased its distribution by 50
percent. "That's a big step forward," he said. "It's a vote of
confidence that will be helpful to us."

He claimed that cable-operator response to ValueVision has
been positive, adding that operators are especially interested in a home shopping service
that will be different and more innovative than QVC and HSN.

"If it appeals to a broader audience and pulls
together the Internet and e-commerce, that's very exciting [to ops]. The challenge to
ValueVision is not to be a traditional shopping service," he said.

The original ValueVision deal included a specific goal of
adding an Internet electronic-commerce component, which has not yet been identified.

Janco Partners, which recommends ValueVision stock, said in
a research note last Wednesday that it made sense for DBS carriers, which have more
available channel capacity, to sign up for ValueVision before cable operators did.

The company also noted that DBS systems tend to generate
less revenue per subscriber than cable because of DBS-subscriber demographics -- more male
viewers, who buy for sports packages -- and the fact that it takes viewers longer to find
new services because there are more channels.

But Janco predicted that upcoming Internet deals and
increased digital-cable distribution should drive ValueVision's stock price up to
about $30 in the near future.

Linda Moss and Kent Gibbons contributed to this story.

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