Home satellite prices falling slowly

Press, 29 February 1984, Page 6

Home satellite prices falling slowly

By ANN COOPER Baltimore Sun (through NZPA) Baltimore In 1979, Neiman-Marcus, the Texas department store known for its unusual Christmas catalogue, offered holiday shoppers a SUS3O,OOO ($NZ46,200) Earth station that could receive dozens of television channels beamed from satellites. Now, the first company to offer a direct-broadeast satellite service will sell customers a smaller version of Neiman-Marcus’s offering for 1U5750 (SNZIISS) or let them use its equipment for a JUS3OO (SNZ462) installation fee. A competitor promises to sell Earth stations for JUS4OO (SNZ6I6) or less, by the end of the year. The price of the Earth stations should drop in the future, but not at the dramatic levels of price drops for larger Earth stations, the officials of two companies that make receiving equipment for the services, said. Unlike the NeimanMarcus equipment, Earth stations sold to direct broadcast satellite service customers are just Im to 3m in diameter. They pick up only the programming

offered by the service’s provider. The Earth stations consist of a dish antenna to pick up programming signals sent from a satellite, a low-noise amplifier mounted on the dish, with a cable carrying signals into a subscriber’s house, and a receiver that usually sits on a television set A descrambler, to decode signals, may be separate or part of the indoor receiver. The cost of each of the four components is similar, said Mr Hal Krisbergh of General Instrument Corporation, which puts together the Earth stations sold or leased by United Satellite Communications Inc., the first company to offer the service. General Instrument, a partner in U.5.C.1., charges the service company about JUS3SO (5NZ539) for each Earth station package. The equipment is installed for SUS3OO (SNZ462) or sold to a customer for SUS7SO (SNZIISS).

Most customers have opted for the installation fee, a U.S.C.I. official said. Those who buy pay SUS2S (5NZ38.50) a month to receive five channels of television programming those who do not purchase

the equipment pay SUS4O (5NZ61.60). Earth stations have been around since the first satellites were launched, but their large size and price tag meant only businesses and governments could afford them. In the mid-19705, some regulatory changes made smaller, lower-cost dishes possible. Earth station prices began to drop to an affordable level for a few well-heeled consumers. By 1980, the price for a dish about 3m in diameter had dropped to ?USIO,OOO (?NZ15,400), said Mr Fred Finn, a lawyer for SPACE, a Washington group representing Earth station users and manufacturers. That price drop led to what one industry official referred to as the “rich rancher’’ market — wealthy people who lived in rural areas with little or no television reception. By setting up an Earth station outside their homes, with equipment that could change the position of the dish antenna, the consumers could pick up 100 or more channels from a variety of satellites. Mr Finn’s group estimates that about a million of these large Earth stations will be in place by early

1985. About 40 companies make Earth station components now, and the price of a 3m dish and additional receiving equipment is 5U52000 to $6OOO (SNZ3OOO to $9250) depending on the equipment added.

The Earth stations, based on the same electronics used in larger stations, are less expensive because the dish antennas they use are smaller, Mr Krisbergh said.

Dish size could be reduced because the service systems used signals sent by higher-powered satellites than those sending the signals picked up by the “rich rancher” market

The growth of the market should drive down Earth station prices further as it will increase the volume of equipment made by General Instrument and others supplying the industry.

Mr Krisbergh said reductions in some component sizes also should yield price declines. A decision to cut prices was based on marketing strategy, as well as on cost reductions brought about by technology improvements. It was difficult to predict what prices would be in the future.