HDTV Key to Staving Off DBS

Anaheim, Calif. -- News Corp. chairman Rupert Murdoch’s pending acquisition of a controlling interest in DirecTV Inc. parent Hughes Electronics Corp. should be a wake-up call for the cable industry to push new services like HDTV, according to a Western Show panel here Thursday.

The Carmel Group chairman Jimmy Schaeffler estimated that 90% of direct-broadcast-satellite-subscriber growth in 2003 is expected to come directly from cable, or about 1.9 million subscribers.

The bulk of those losses will come from five states -- California, Ohio, Colorado, New York and Florida -- translating into roughly $320 million of lost revenue, Schaeffler said.

Whether cable will be able to stem that tide is dependent on the industry’s ability to roll out products that aren’t available on satellite -- namely HDTV.

HDTV may prove to be a formidable weapon, especially because Murdoch apparently seems more focused on other technologies, like rolling out digital-video recorders. "Murdoch has been much less evangelical about HDTV than [Comcast Corp. CEO] Brian Roberts," panelist and Janco Partners Inc. cable analyst Matt Harrington said.

Cable Television Laboratories Inc. chief technology officer David Reed said that while in the past, cable has lagged behind DBS technologically -- especially in the digital arena -- HDTV may change all of that.

"I think we’re going to see a conversion," he added. "Cable will move to the top of the consumer perspective when they are going to look for HDTV."

Reed said cable’s advantage in the HD arena is further bolstered by the arrangements that many MSOs have made with consumer-electronics retailers.

"All of the major MSOs have local HD channels now, and a lot of people are buying HD sets," he added. "When they buy a set, they are likely to get marketed with an MSO’s HDTV service."