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echo: tvro
to: PAUL LOPEZ
from: CHARLIE YOUNG
date: 1997-04-25 15:20:00
subject: Switch to digital?

> For those of us who own analog systems how will the switchover to
> digital affect us?
Paul,
I have a big dish analog system.  I think our big dishes may still be
useful for several years to come.  I have several reasons for thinking
that.
The cable networks have an interest in keeping their C-band subscribers
because we pay about 5 times more for programming than cable and small
dish viewers.
General Instruments (or whatever their name is now) want you to believe
that you need to buy their system right away -- that in a few months
there won't be anything left to watch on your existing system.   That
may indeed happen eventually, but I think the switch away from analog
could be a long process over a period of several years.
Most home viewers will not convert to digi-cipher (GI is now calling it
4DTV) at the present price of $1,000.  And besides price, there is the
issue of compatibility.  The Family Channel and possibly others will be
using a competing non-compatible system.  How many people will spend
$1,000 or even $700 for a system that will not receive some of the
popular channels when they could pay $200 for a small dish system and
get more channels for about the same total programming cost?
Why does the digi-cipher cost so much when the small dish systems are so
cheap?  Competition.  There are 2 different manufacturers for the Hughes
DSS sstem, and there is competition between the small dish systems.
Unlike the DSS people, GI does not like competition.  Years ago GI sued
potential competitors and won.  The days of 1,000% markup on
video-cipher modules are coming to an end.  GI knows that, and they have
been developing other products.  However, they are still not allowing
competitors to build digi-cipher equipment.
I want to try to explain a difficult concept of programming cost.  Some
people do not understand that C-band customers pay more for programming
when their total programming bill is about the same as cable TV
subscribers pay for a similar package of channels.  It really is not too
difficult for people who are willing to think about it.
Cable TV subscribers (and little dish subscribers) pay about 90% to the
cable company (small dish service) for the delivery of the programming
to their homes.  Only about 10% of their bill goes to the USA network,
WTBS, and etc.
C-band subscribers pay nothing for delivery of programming other than
uplink costs which Cable TV subscribers also pay as part of their 10%.
C-band subscribers pay about 10% to 15% for administrative costs and
fees to General Instruments.  So, most of their bill goes directly to
the USA network, WTBS and etc.  So, that is why the total bill may be
similar, but the amount that goes to pay for programming (as opposed to
delivery costs) is much more for C-band customers.
--- PCBoard (R) v15.3/M 2
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