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Thursday, September 22, 2005

EchoStar turns 25

Just a couple quick links to a set of feature stories I wrote for the Hollywood Reporter this week, on the occasion of Echostar's 25th year in business. (They operate the Dish Network.)

The main piece is "EchoStar at 25: Innovative marketing and new technology help the satellite service provider stay competitive." It focuses a bit on EchoStar's colorful history, but mostly on the challenges the company faces today.

Here's the gist:

    Twenty-five years [after the company was founded], EchoStar is a publicly traded entity with a $13 billion market cap, nine Earth-orbiting satellites and 11.5 million subscribers to its Dish Network. The Englewood, Colo.-based company competes ferociously for pay TV customers with cable operators and with News Corp.'s DirecTV, which boasts 14.7 million subscribers but also enjoyed a two-year head start in the small-dish arena.

    ...[A]s the company marks its silver anniversary, it faces fresh competitive crosswinds that could threaten its future growth. Telcos such as SBC Communications and Verizon are beginning to offer video alongside their traditional phone and Internet services, and cable operators are developing "bundles" of services by marketing low-cost voice-over-Internet telephony.

    "I think the competitive front is changing here, and it's changing more in favor of cable," Kagan Research analyst Derek Baine says.

    Other observers cite the difficulty of acquiring and retaining customers without overspending on marketing and/or on new technology including digital video recorders.

    Beyond the changing marketplace, the biggest questions confronting EchoStar are whether consumers are gravitating more toward buying bundles of services and how the company's relationship with SBC will change as SBC begins to sell its own TV offering, delivered through fiber-optic cable.

Accompanying the main event are a couple of sidebars:

  • Tech talk

    A hand-held video player is the company's latest innovation.

    Watching television used to be about sitting back on the couch with a remote control, but EchoStar plans to change that with its latest innovation: a portable video player called PocketDish, set to debut next month.

  • Dishing it out
    As cable operators and satellite providers eye each other's customers, new entrants are jumping into the scrum.


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