Direct TV....
from the stars to you
Providing more than 175 channels and numerous other
features, Direct TV targets the Caribbean.
By Domini Harewood
Direct TV was expected to be introduced to the Caribbean by the beginning of this year, but financial and technical problems have delayed its startup. The communications companies behind the project now expect the new system to be operational by the third quarter of 1996.
Since the technology is still new, even in some parts of North America and Europe, the first question is usually - "What on earth is Direct TV?"
But that's just it, Direct TV gets its name because the signal from the various broadcasters is sent DIRECTLY to the subscriber, via satellite. Unlike the way communications technology has worked up to the present, Direct TV requires no expensive cable network to subscribers nor investment in land- based television stations to process the television signals before it is transmitted to homes.
The signal being broadcast from around the world is sent to the satellite in space. This is then transmitted directly to your home via the satellite.
To tap into this satellite link- up, the consumer buys a digital satellite dish, a receiver and a remote. This represents some expense for the subscriber, but providers of the service maintain that the initial outlay is less than when buying the larger more conventional dishes. The digital satellite system is also much smaller and more adaptable than the dishes now seen in many backyards. Whereas conventional satellite users switch from one satellite to another, Direct TV subscribers use only one satellite - a new Hughes "bird" anchored in orbit over Southwest U.S.A. This one satellite processes the signals of about 175 channels or broadcasters.
Direct TV provides more than 100 basic channels, plus sports, adult and pay- per- view channels. It is also capable of handling telephone communications and conventional radio stations as well.
Users of conventional satellite dishes - called C- KU- Band dishes - still have access to more than 400 channels from 17 to 20 different satellites. To get local programming, users of both the conventional satellite dishes and Direct TV systems still need either cable hook- up or a regular TV antenna.
Direct TV dishes not only take up less space, they also require less range of sky to access the signal. They cost less than large dishes and offer better sound quality.
TV6, a television station owned by the Caribbean Communications Network (CCN)- a subsidiary of the Caribbean conglomerate Neal & Massy, plans to introduce a 144 - channel Direct TV service to Trinidad and the southern Caribbean. It will be in collaboration with the Venezuelan- based Cisneros group of companies. Cisneros has been an investor in CCN since early 1995, when they purchased a 10 percent equity into the mass media firm.
Galaxy Latin America, a South American- based communications company has been identified as the leader of the consortium which will package and deliver the system to households across the region. The technology is expected to deliver digital video and CD quality audio through 144 television channels and 60 music channels from as far north as Mexico, through Central and South America to the Caribbean.
According to the April 1995 edition of "Private Cable and Wireless Cable" magazine, three Latin American media companies and Hughes Communications Inc. have formed a partnership to establish Direct TV, the first all- digital direct- to- home (DTH) satellite service in Latin America. The partnership, known as Galaxy Latin America, includes Brazil's Televisao Abril, Mexico's M.V.S Multi- vision, Cisneros and two other Venezuelan companies.
Within Caricom, alliances have already been formed with telecommunications and broadcasting companies to administer the system at the local level. Administration of the entire network will be done via Galaxy Latin America and a branch company for the southern Caribbean (Galaxy Caricom) which has already been formed to oversee the operation in this region, with headquarters in Trinidad.
The initial role of Galaxy Caricom will be to lobby for supporting legislation, while it continues to set up the equipment necessary for the system to work. Galaxy's strategic alliance with Trinidad's CCN (TV6) and the other television operators in the southern Caribbean, will be the main rival of local cable companies. According to a CCN official, the alliance is expected to provide "a video and audio programming package that will be offered directly to Caribbean subscribers. The programming will include regional and international cable channels, pay- per- view movies, together with sports and special events."
On a hemispheric scale, Galaxy Latin America will package and deliver digital video and CD quality audio through 144 television channels and 60 music channels to households in Mexico, Central America, South America and the Caribbean from the beginning of 1997.
CCN executives say people who decide to get direct satellite television will be given a package deal. Included in the package will be a monthly fee of $150.00 for about 39 channels of programming. The consumer can, however, choose the channels that he prefers. After the consumer purchases the satellite, receiver and remote, he must also pay a subscription fee, which a CCN spokesperson was unable to estimate.
Local Cable TV operators were still doubtful of the new technology's ability to seriously threaten their market. They consider the large capital outlay required by individual subscribers to be prohibitive. Phil Cleary, president of Transcable Ltd, said he expects the initial start- up cost of Direct TV to be high both for the local administrators, as well as subscribers.
"For the individual subscriber the initial cost would probably be in the vicinity of US $800 to $1,000 for a small dish, plus the monthly rental fee to unscramble the signal. If the package deal only includes about forty channels then the cable companies would still be ahead."
He believes that once the international property rights agreements come into operation, all providers of cable channels, especially movie channels, will have to pay more for the right to transmit programming. There still remains the issue of how Direct TV will impact on local television stations. Trinidad and Tobago Television (TTT) launched its attack against CCN TV6 by announcing a strategic alliance with the Cable companies that would see TV6 removed from the Cable television line- up.
This agreement with the Cable companies will give TTT exclusive access to Cable transmission from Cableview, Transcable, AJ Cable and Rainbow Cable. This is being viewed as a pre- emptive strike against Direct TV, as cable subscribers will now have to switch off their cable connection and use the reception of their old antenna to view TV6.
Within the region's telecommunications circles, there has been much speculation about the source of funds for this costly and risky venture backed by CCN. CLICO (Colonial Life Insurance Company Ltd) has been named as one of the underwriters to a $20 million issue planned by CCN. The other underwriter is the Bank of Nova Scotia Trust Limited. Some reports indicate that $10 million of the share issue should be able to cover the cost of setting up the Caribbean end of "Direct TV."
Merchandising and the legislative requirements for copyright protection and broadcasting are yet to be finalised by many of the Caricom countries. Nevertheless Direct TV seems to be rearing to go, but, there continue to be hiccups and hence the delay since the initial launch last year. CCN spokespersons revealed that the unveiling has been tentatively set for September/October this year.
The bottom line is whether or not the consumer will buy into Direct TV and make it a profitable venture. Many of the potential customers seem enthusiastic about the idea until they realise the cost involved. The full Direct TV package costs about US$1500. Financing packages will be available requiring a downpayment of about half with monthly payments thereafter. In some territories the monthly payments will also cover annual licensing and access fees associated with the Direct TV system.
Theodore Moore, a Senior Telecommunications Technician at American Oil Company (AMOCO) already owns a conventional satellite dish. He believes Direct TV has vast potential because it uses signals on the K- Band for its transmissions, and this is more robust than the C- Band transmissions used by conventional dishes. Technically, with the larger C- Band dishes rain or bad weather can wipe out or destroy the signal for an extended period.
In the final analysis, the customer is always right and will
decide whether or not the advantages outweigh the drawbacks. So,
while few people were able to purchase their own satellite dishes
and many welcomed the services offered by the local Cable TV operators,
Direct TV still has to face its biggest obstacle so far- Money.
It's now a wait and see process.
Executive Time "Online" also has a printed version which is available throughout the Caribbean and some selected North American cities.