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Two stories in the morning's New York Times and one by the Associated Press gives a hint of what to expect from DirecTV now that Rupert Murdoch is in charge. Here are some quotes. Complete articles are at:


EchoStar Faces a Big Challenge

Now that Mr. Murdoch has finally made the deal he has been anticipating for at least a decade — the deal that brings the News Corporation into the United States satellite television market — EchoStar will be hard put to continue to outperform DirecTV the way it has for the last 18 months.

As the cable television industry finally begins to deliver on the promise of its long-lamented digital upgrades and as DirecTV, the nation's No. 1 satellite television carrier, finally appears to be falling into the hands of aggressive and capable media operators, EchoStar and its mercurial chairman appear to face their biggest challenges in years.

"EchoStar has been significantly more focused over the last 18 months or so," said Mike Goodman, an analyst for the Yankee Group, a communications and technology consulting firm in Boston. "You have seen almost nothing new out of DirecTV in the last 18 months. In fact, you have seen their subscriber additions cut in half of what they had been previously.

By the fourth quarter of last year, EchoStar added 400,000 subscribers to DirecTV's 260,000. Over all last year, EchoStar added about 1.35 million customers while DirecTV added about 850,000. DirecTV remains bigger over all, with about 11.2 million subscribers to EchoStar's 8.2 million, but EchoStar has done a far better job than DirecTV of remaining focused on operating its core business.

B Sky B: Big Gains on Big Gambles
Bloomberg News

For anyone weighing Rupert Murdoch's ambitions after his acquisition of DirecTV in the United States, consider the barnstorming saga of Britain's B Sky B, started as part of his budding empire in 1989 with a modest four-channel network that barely reached a million homes.

The figures now are 6.6 million subscribers reached by satellite, a further 3.4 million by cable and a raft of 200 channels including sports, movies, children's shows, news and music. It is probably the most successful pay-TV platform in the world.

The gains have not been without huge gambles. Early on, Mr. Murdoch, whose News Corporation holds 35.4 percent of B Sky B, offered what seemed vast sums for exclusive rights to key sporting events. Mr. Murdoch also gave away set-top boxes and satellite dishes, spending hundreds of dollars to acquire every new subscriber. But the gamble paid off when viewers realized they needed to subscribe to Sky to see favorite sports because traditional channels had been squeezed out.

Sky also made an expensive gamble on innovative digital technology, offering viewers at home the ability to change camera angles and replay goals using remote controls. Sky News, a 24-hour channel, offers eight separate screens to enable viewers to follow different news stories.

Sky returned to quarterly net profits last year. At the same time, its net debt stood at over $2 billion by Dec. 31, 2002 — its lowest since June 2000, the company said. In the second half of 2002, Sky said, programming costs increased by $136 million, to $1.15 billion. Many analysts say B Sky B is poised to become a "cash machine." The company's bare-knuckles advance has rattled rivals.

DirecTV Could Win Murdoch More Clout
By GARY GENTILE, AP Business Writer

LAS VEGAS - Rupert Murdoch's takeover of the nation's largest satellite television provider could become a platform to launch and sell new Fox channels, while restraining cable costs, industry analysts predicted.

Consumers are unlikely to see any impact soon, especially since the deal, if approved by regulators, won't close until the end of the year. And Murdoch said Thursday that substantial changes to DirecTV will probably not show up until 2005.

But DirecTV's 11 million subscribers will give News Corp. leverage negotiating with program producers such as The Walt Disney Co. and AOL Time Warner Inc., who want cable systems to pay more for airing their popular channels.

"The leverage will keep prices down or give them some added profitability so they don't have to raise prices as much," predicted Steve Mather, an analyst with Sanders Morris Harris. "As an industry, distributors are growing their ability to fight back against increasing programming costs."

DirecTV, its rival Dish Network, and cable companies have been fighting hikes sought for channels such as Disney's ESPN and AOL Time Warner's CNN. Now that he has his own distribution outlet, Murdoch can use the leverage he has with his own popular networks, such as Fox News, to negotiate better deals for DirecTV.
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