Local TV No Big Attraction for Satellite, Cable Customers, Studies Find
While cable companies are required to carry local TV news and entertainment programs, satellite broadcasters are prohibited from doing so, a strategy known as "local-into-local." (Ted Turner began his television empire in the 1970s by doing exactly the opposite. He put Atlanta's local UHF Channel 17 on satellite transmission, and the third-rate station quickly became the "Superstation," sending old movies and ads for rural Georgia used car dealers as far north as Alaska and as far west as Guam.) The satellite industry---especially EchoStar---has campaigned strongly to have this regulation changed in the belief that it is a major objection among potential satellite-system buyers.
The Strategis studies found that local programming isn't a strong draw among present satellite subscribers, and it won't attract many new ones. "Cable operators must consider DBS a strong contender vying for a piece of cable's coveted market share, but the availability of local signals from DBS is not the variable that will tip the scale," according to Minal Damani, a Strategis Group senior consultant.
Strategis surveyed 380 cable subscribers and found that only 4% of them consider local programming a decisive factor in the possible switchover to DBS. Nearly 19% claimed to be "happy" or "satisfied" with their cable service, and the same percentage described DBS as "too expensive" and cable as a "better value." Over 17% said they "don't watch much TV," and 8.2% cited apartment restrictions, "obstruction by trees," or "no SW view" as reasons for sticking with cable.
In a related study of 300 satellite customers, Strategis found that 18.3% said they would be "likely" to change satellite service providers to one that carried local programming; an additional 18% described themselves as "maybe likely" to change. A majority---62.3%---were "probably not likely" or "definitely not likely" to switch simply for the sake of local TV.
The results of these studies contrast strongly with a Stereophile Guide to Home Theater Web site Vote question posted several months ago. In response to "How important are local TV broadcasts to you?," 43% said "very important," with another 27% responding "moderately important." Twenty percent of Guide readers who responded said local programming is "not important," and 6% said it is "irrelevant."
Strategis believes that satellite services will continue to see strong growth. "DBS will secure 22% of the multichannel video market by 2003," Damani says.