trade event report

SBCAs 20th biannual SkyForum + + + +
By AL BERRIOS

You gotta love those satellite guys: first, they all start companies, then they buy each other up. It's one of those industries where everyone just knows everyone else, mainly because of the immense cost of joining this little club. I mean, think about it, you gotta build a satellite, send it into space, then exploit it with a steady stream of content, then market the hell out of it so you'll have enough subscribers to make it worth while.

At just about all of these things, you have the usual suspects: DirecTV and EchoStar, along with Showtime and HBO, and of course the satellite makers. But in the last two SkyForums I've attended, there have been some new developments in the industry. In May, News Corp finally got their bid to buy DirecTV approved. And this time, Cablevision launched Voom. Cablevision's founder and Chairman, Chuck Dolan presented.

Here's a guy with billions in the bank, in his eighties, and pretty much a legend for having done what he has. He's got all his faculties together, no need for a wheelchair or even cane, and pretty much no worries. The viability of his vision to launch Voom was questioned, especially after having changed strategy and decided on a spin-off, then having his investors pull out, both clear omens of the difficulty of this project. But he just sat there and gave the most witty and jargon-free answers you'd ever hear. He essentially used logic to sell his idea, not numbers. (I.e. when color hit TV, people didn't switch back to black and white. So, it's reasonable to assume that once people see the quality of satellite, they'll adopt it and not go back to analog.)

It's interesting to note that Chuck is at such a stage in his career that he no longer needs concrete research and facts to support his plans. We can basically take his remarks as facts, since he's one of the guys that makes the sort of decisions that impact entire industries.

Satellite claims to have higher customer satisfaction scores than cable, but fails to define what is the satisfaction based on (i.e. customer service, pricing). It's true that due to the higher technical aspects of satellite, customer service is a huge expense for the industry, but with over 20 million subscribers, people become accustomed to the technology and it becomes easier. Further, it isn't price, which, even though cheaper than cable, proven by Goldman Sachs in one of their studies of the industry for May's conference, is still too high for mass consumer adoption. And it isn't choice, since consumers can get the same, if not more, channel choices via digital cable. (It could be the choice of choosing something other than your local cable company, however, anyone smart enough to recognize their choices probably doesn't spend too much watching television anyway.) So, why, pray-tell, are customers so satisfied with satellite?

I don't believe the industry knows either and until then, they probably won't be able to compete on the same level with cable. They will probably just go with the flow, then recognizing later some consumer trend and taking credit for causing it, even though it was, as usual, consumer-driven.

The location was the Waldorf on a Thursday, October 30th, 2003. I expected the same drab, third floor ballroom crap-ola as usual. However, I was pleasantly surprised to attend the event in the 16th floor restaurant, which was better lit and had superior food - just as delicious as the Cipriani's lunch. Overall, I give this event 4 pluses (+ + + +), mainly because it was a worthwhile learning experience. Although there were plenty of networking opportunities, (I've had the privilege of meeting and pitching one of the top cable channels as a result of that conference), I didn't really take as much advantage as I should have.

Write to Al Berrios at editor@alberrios.com

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