- The Washington Times - Sunday, August 15, 2004

DENVER (AP) — As a self-described creature of habit, Glen Goldman stayed loyal to his cable company until he was left without a choice.

Mr. Goldman switched to satellite TV service when he moved into a new home that lacked the proper wiring for cable, and he has never looked back. The advantages he sees roll off his tongue — digital picture, high-definition TV, more choices and a user-friendly channel guide.

“The number of channels and variety is much better than what I had in cable for a few dollars more a month,” Mr. Goldman said. “I like being able to get the direct signal without it being weakened by having to go through various switches and cable lines.”

The Denver lawyer is among thousands of Americans who have defected to satellite TV as the providers have reported hefty gains while the cable industry has declined. Consumers probably will see aggressive marketing promotions in the next six months as companies jockey for customers, analysts say.

The battle comes down to service and price: Cable companies offer video-on-demand features, high-speed Internet and, in some cases, telephone service. Satellite providers have all-digital service and channel packages that can be cheaper and broader than digital cable.

“The consumer is voting with their pocketbook and they’re saying they prefer satellite, and I don’t think we’re as good as we’re going to get,” Charlie Ergen, chief executive of EchoStar Communications Corp., which operates the Dish Network, told analysts last week.

Comcast Corp., the nation’s largest cable company, is expecting a slightly more competitive environment but thinks it will post a net subscriber gain by year’s end. “We like the fact that we’re going to have unique competitive advantages in the marketplace,” said Dave Watson, executive vice president of Comcast Cable operations.

Satellite television has grown substantially since 1999 when Congress allowed providers to begin offering local channels. Today, it has nearly one-fourth of all households that subscribe to pay television services.

News Corp.’s DirecTV, the nation’s largest satellite TV provider, is in 106 markets, and No. 2 EchoStar is in 144 markets. By June 30, the satellite providers had posted a combined net gain of about 1.6 million subscribers, putting their total at 23.2 million subscribers, according to Kagan Research LLC, a media business research firm.

Part of the growth can be attributed to the expansion into new markets, including rural areas, as well as competitive pricing because cable customers typically have to pay extra for digital service, analysts say.

Satellite providers also have been quicker to the market with innovative technology, such as interactive services and digital video recorders, said Sean Badding, president of the Carmel Group market research firm.

Mr. Goldman, who bought his Dish Network service from Sun Comm Technologies Inc., pays from $10 to $15 more a month than he did for analog cable. He particularly enjoys the digital video recorder, which allows him to record multiple showings of a program his 3-year-old son loves.

“That’s extremely important when you have a kid that loves a certain cartoon and they may be in school or unavailable,” he said. “You want to get them so they can watch that at some point in the day when you need a few minutes to yourself.”

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