The Yankee Group Forecasts Direct Broadcast Satellite To Reach 25 Million Subscribers by 2005

Sep 19, 2000, 01:00 ET from Yankee Group

    BOSTON, Sept. 19 /PRNewswire/ -- Spurred by the addition of local channels
 and new services like high-speed Internet access and interactive TV, the
 Direct Broadcast Satellite (DBS) audience in the United States will grow to 25
 million subscribers over the next five years, according to a new Report from
 The Yankee Group.
     ( Photo: )
     According to the Report, titled "Direct Broadcast Satellite: Growth in New
 Directions," historically DBS has been strongest in rural areas without access
 to cable television and among early adopters seeking more movies, sports, and
 improved picture and sound quality.  But with recent legislation permitting
 satellite delivery of local stations, DBS now competes more effectively with
 cable in urban and suburban markets.
     In addition, new services such as high-speed Internet access, satellite
 receivers equipped with digital video recorders (DVRs), and Interactive TV
 will have a significant impact on the industry's future growth.
     "The DBS market is evolving as it adds new services," notes Michael
 Goodman, senior analyst for The Yankee Group's Media & Entertainment
 Strategies Planning Service.  "As DBS providers roll out local station
 packages in more markets and begin to offer high-speed Internet access and
 interactive TV applications, DBS will expand its appeal to a wider range of
     Year       DBS Subscribers (millions)
     2000            14.5
     2001            17.3
     2002            19.9
     2003            21.9
     2004            23.6
     2005            25.0
     The Report draws upon data gathered in surveys conducted with DBS and
 cable subscribers by The Yankee Group in conjunction with the Satellite
 Broadcasting & Communications Association (SBCA.)  Some key findings from
 these surveys include:
     -- Access to Local Stations Is Affecting Cable:  Among new DBS subscribers
        -- households that acquired service during the first three months of
        this year -- 70% say they have access to cable television, and 17% of
        those with access subscribe to cable.  But among those new DBS
        subscribers who receive a local station package from their satellite
        provider, only 8% still maintain a cable subscription.
     -- Hardware Prices Are Down, but Subscription Fees Remain Steady:
        According to new subscribers, the median cost of a DBS system
        (including installation) has declined 100% over the last two years,
        falling from $300 in 1998 to $150 this year.  But the median
        subscription fee paid for DBS service has held steady at $40 per month
        over the same period.
     -- DBS Subscribers Are Interested in Satellite Receivers with DVR
        Capabilities.  Nearly a quarter (23%) of all DBS subscribers said that
        they were very or somewhat interested in owning a satellite receiver
        with DVR capabilities.  DVRs, which give viewers greater control over
        what they watch and when they watch, were especially appealing to
        DBS's best customers, multiple premium subscribers.  Among DBS
        households that subscribe to multiple premium services, 32% said that
        they are very or somewhat interested in owning a satellite receiver
        with DVR capabilities.
     -- DBS Customer Satisfaction Remains High: 79% of DBS subscribers would
        recommend their system to a friend, and 38% new DBS subscribers
        consider friends and family to be the most influential source of
        information when deciding to purchase a DBS system.
     The Report also identifies several other factors that will sustain
 subscriber growth in the years to come.  Among them:
     -- DBS is Negating a Key Advantage That Cable Operators Have Held for
        Years: access to local stations.  This in turn is causing cable
        penetration among DBS households to decline in markets where DBS
        providers offer local station packages.
     -- DBS Will Enjoy New Opportunities in Suburban and Urban Markets.  Local-
        to-local service allows DBS providers to even the playing field in
        urban and suburban markets in terms of local channel availability.
        This is particularly important as cable operators aggressively
        introduce digital cable into these markets to counter DBS.
     -- DBS Will Quickly Emerge as a Major Player in High Speed Internet
        Access.  Though behind both cable modem service and DSL, high-speed
        Internet access delivered via DBS will be launched on a nationwide
        basis, allowing DBS providers to match HSI offers in some markets and
        beat the competition in others.  In addition, data services will bring
        new incremental revenue streams to satellite providers in a maturing
     About Media & Entertainment Strategies
     The Yankee Group is an internationally recognized leader in technology
 research and strategic consulting.  The company's Media & Entertainment
 Strategies practice examines the tradeoffs that businesses and consumers must
 make as traditional forms of media are joined by new products, services, and
 applications.  The Yankee Group continues to distinguish itself by providing
 personalized one-to-one analysis and planning assistance to its customers.
     About The Yankee Group
     The Yankee Group ( is an internationally recognized
 leader in technology research and strategic consulting, whose broad-reaching
 analysis encompasses all areas essential to e-business success: the Internet,
 electronic commerce, communications, wireless/mobile, computing, and
 enterprise applications.  The Yankee Group specializes in assisting companies
 with their e-business, enterprise networking, and Internet technology and
 electronic market initiatives while maintaining synergy with their overall
 business strategies.  Headquartered in Boston, the company's research and
 sales staff is located throughout North America, Europe, Latin America, and
 Asia-Pacific.  With over 30 different planning services, complete consulting
 capabilities, and a full calendar of technology-focused conferences and
 seminars held around the globe, The Yankee Group is truly a "one-stop shop"
 for strategic analysis and advice on the information technology industry as a
 whole.  The Yankee Group continues to distinguish itself by providing
 comprehensive research, electronic content delivery, and personalized one-to-
 one analysis and planning assistance to its customers.  For additional
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SOURCE Yankee Group