NEWS CORP. STILL HOPEFUL OF DIRECTV DEAL, MURDOCH SAYS
News Corp. Chmn. Rupert Murdoch said at Sky Forum in N.Y. that company could live “with or without” DirecTV or entity in U.S. market. Reiterating familiar theme during negotiations with Hughes Electronics and GM, Murdoch said “although the U.S. is an important part” of strategy to develop global satellite broadband company, Sky Global is “viable without a U.S. presence.” He said U.S. presence was nice to have, but it wasn’t necessary to the overall success of the operation.” Moments later, Murdoch wouldn’t comment directly on status of talks despite widespread reports Hughes no longer was interested in selling DirecTV unit and had backed out of deal. However, News Corp. spokesman said as Murdoch was being ushered out side door followed by throng of reporters: “We're still talking to DirecTV. The deal is not off, but the talks are going very slow.”
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Later Pegasus CEO Mark Pagon, whose company has active interest in deal as DirecTV reseller, told us he was waiting anxiously to see final outcome of negotiations. “It would be nice to have a resolution one way or another,” he said: “I'm sure [EchoStar CEO] Charlie Ergen feels the same. It will allow you to plan for the future. You have to prepare yourself for whichever way it goes.” Pagon said he wasn’t surprised talks had dragged on. “It’s a very complicated set of issues.” He said Pegasus would keep its options open while deal was being negotiated: “You have to be flexible and opportunistic. If you can benefit, you adapt.”
Murdoch said no matter what happened with DirecTV, News Corp. subsidiary Sky Global was uniquely positioned for future because of strength of technology, management team, wide distribution base, global satellite platforms. He said deals with NDS and Gemstar-TV guide would make company “worldwide leader” in interactive TV applications. He said company had network that reached 85 million homes in 60 countries through affiliates that included BskyB in U.K., Star (Asia), Stream (Italy), Sky PerfecTV (Japan), Sky Brazil, Sky Mexico, Sky Multi-Country. “The businesses of Sky Global make us the most truly international of international media providers, connecting us with audiences around he world that stand to grow substantially” in coming years, Murdoch said. Advantages of satellite technology, control company enjoys over distribution of service, and “ability to mitigate with other platforms the stunning success of the Interactive TV laboratory” at BskyB made him confident company was headed in right direction, he said.
“Soul” of News Corp. is content, Murdoch said. “On any given day, nearly half a billion people somewhere on the planet come in contact with a News Corp. product.” He said satellites offered “the easiest” and “cheapest” way to distribute services. “The successful TV providers of the future will not be those who indulge in high technology for high technology’s sake. Any new service must represent a clear and compelling improvement over previous services.” Popularity of e-mail, interactive games and betting on interactive TV has given Sky Corp. financial success and opportunity to enhance popularity of interactive service. “Through BskyB, we have learned people are more inclined to buy their pizzas than their produce,” Murdoch said: “That they buy their concert tickets from their TVs, but not their travel packages. We have been able to tailor our understanding of our customers” to meet their needs. -- Bruce Branch
Sky Forum Notebook…
SBCA Pres. Charles Hewitt said direction of must-carry case would be resolved in next 2 months when U.S. Dist. Court, Alexandria, Va., was expected to issue ruling. SBCA asked court for summary judgment in case challenging constitutionality of must-carry. Broadcasters and U.S. govt. wanted case dismissed. SBCA and EchoStar also appealed FCC must-carry rulemaking to 4th U.S. Appeals Court, Richmond. Hewitt said other important issues for industry included need for govt. to set digital standards and several bills in Congress aimed at providing satellite broadband services to rural areas more rapidly. He said SBCA would make Hill presentation on how services work in June. He also said despite 1.5 million shortage of skilled workers for DBS industry, EchoStar, National Rural Telecommunications Cooperative and DirecTV were among entities that had agreed to create standard of installation and certification program for installers. “This will improve services to our customers.”
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Satellite services in U.S. generated $40 billion revenue, based on results of 2001 global satellite survey conducted by Satellite Industry Assn. (SIA) and Futron Corp. that compiled data from 900 companies, SIA Pres. Clay Mowry said. Ground services accounted for $18 billion, satellite manufacturing $16 billion, launch services and vehicle manufacturing $8 billion. Industry had successful launch of 44 geostationary satellites, including 29 commercial and 5 military birds.
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OpenTV and EchoStar said one million DISH network receivers were providing interactive TV.