Rocket Man Touts Dish Prospects
Denver -- In a packed ballroom at the Adam's Mark
Hotel here last Thursday, EchoStar Communications Corp. chairman Charlie Ergen took the
stage to strains of "Rocket Man" to open his company's annual dealers'
Ergen might well claim that title. His multibillion-dollar
net worth is tied up in his company's stock, which had risen 20 percent one day
earlier, after management hosted an analysts' meeting and announced such news as a
partnership with Gilat Satellite Networks Ltd. to deliver two-way Internet access and
video to a single satellite dish.
His busy Dish Network also cut programming deals with Starz
Encore Media Group LLC, Turner Broadcasting System Inc., Speedvision and Outdoor Life
Network; announced plans to build three new satellites; and said it would work with OpenTV
Inc. to develop direct-broadcast satellite boxes with built-in hard drives.
The stock's trajectory dipped Thursday, though, after
at least one Wall Street analyst advised investors to take some profits following an
excessive run-up. However, another analyst had already raised his target price to $142 per
share from the prior $100. EchoStar closed at $114.13 Thursday, down $6.19.
Meanwhile, Ergen had made huge subscriber-gain predictions
to Wall Street, pumped by an apparently strong response to its local-TV offering. SG Cowen
Securities Corp.'s Gary Farber -- the analyst with the $142 target -- said Ergen now
expects to add a net 13 million to 18 million Dish subscribers over the next few years,
instead of the 6.6 million it had been expecting. It currently has 3.4 million.
The Gilat-To-Home hardware -- in the news a week earlier
through an alliance with Microsoft Corp. before the EchoStar distribution deal was
confirmed last Wednesday -- was on display here. The 24-by-36-inch dish -- which includes
a component to send data up to a satellite -- drew local camera crews.
In Los Angeles, DBS rival DirecTV Inc. and parent company
Hughes Electronics Corp. tried to downplay the announcement.
"It really didn't surprise us that they're
following our lead into delivering a high-speed Internet service over satellite,"
DirecTV spokesman Bob Marsocci said. "Hughes has really pioneered the service, and
our deal with AOL [America Online Inc.] will really strengthen the 'DirecPC'
Marsocci added that the DirecPC service would be upgraded
to two-way via satellite later this year, eliminating the need for a telephone-return
path. DirecTV customers could receive both the video and data services through a single
A dealer at last week's summit said the stock price
overshadowed the rest of the news.
Northeast Indiana satellite dealer King Oberlin -- who owns
KAS Satellite & Cable Inc., as well as shares of EchoStar's stock -- said he
hoped to be able to retire within five or six years because of his investment.
Oberlin praised the summit, saying it reminded him of the
excitement of satellite shows in the early 1980s.
Dozens of EchoStar's programmers and technology
partners paid for booth space on the exhibit floor, which was situated centrally between
the dealer seminars and the merchandise showroom, where hyped-up retailers could buy
Dish-branded T-shirts and baseball caps.
The event even drew a 1970s TV action figure, just like a
cable show: Dennis Weaver, TV's McCloud, posed for pictures at the Starz
The company was drumming up support for its new "Super
Pak," an expanded, nine-channel premium service that Dish will continue to sell for
$10.99 per month -- the same price as its current four-channel offer.
BET Movies/Starz! will be available for the first time on a
national DBS service as part of the Super Pak. Starz Encore chairman John Sie told dealers
here that "the first and only black movie channel" would give them something
unique to sell.
Dish also plans to include six other Encore channels,
including thematics, in its new "America's Top 150" package, set to launch
After sharing a sample of the new Top 150 lineup, EchoStar
programming vice president Michael Schwimmer said, "Now you know why I'm a kid
in a candy store."
The Top 150 package will include all of Dish's
"America's Top 100" expanded-basic package, plus six Encore thematic
channels, at least two movie channels from Showtime Networks Inc., CNN/SI, Turner's
new Boomerang cartoon channel, Speedvision and Outdoor Life. The latter two had been
pulled after the DBS service attempted to sell them a la carte.
Other networks that appeared on a list of probables for the
Top 150 package included Home & Garden Television spinoff Do It Yourself, Bloomberg
Television and A&E Television Networks' Biography Channel and History Channel
Dish will also add Turner South to its current Top 100
package, but only to subscribers within a six-state footprint in the Southeast.
Ergen said EchoStar would spend $100 million on national
advertising this year to promote the expanded programming available on the "Dish
500" hardware platform.
"We had been somewhat hesitant to talk about our
system," he said, adding that it's time to turn up the advertising now that the
company has the capacity and satellites in orbit to compete. "Our system has
leapfrogged the competition," Ergen said.
Last week, EchoStar said it has ordered three more
satellites for delivery over the next two years. Two high-power DBS birds will use
spot-beam technology to target local broadcast signals to individual markets. The third
bird will use fixed satellite spectrum and a hybrid Ku- and Ka-band technology for data
In other news last week, EchoStar and OpenTV agreed to
develop set-top boxes with built-in hard drives to store video programming and interactive
The first OpenTV applications -- including instant
local-weather updates from anywhere in the country -- will be introduced this spring,
without the need for a hard drive.
"We had $1 billion in the bank and we didn't know
what to do with it, so we went out and signed for three new satellites," Ergen told
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