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About Satellite-TV
1981-1985: Dish "Fever" Grows

The DTH industry grew quickly from its modes beginning with each new installation, and "word of mouth" advertising grew for the industry. Because early DTH systems were very large, simply having one installed drew the neighborhood's attention. Once non-dish owner experienced the diversity of satellite-delivered programming (new cable services were now rapidly launching), coupled with the unsurpassed audio and video quality offered by a DTH system, the "fever" began to spread across the land. For satellite TV to move beyond the "techies" and "early adapters" into the mainstream consumer marketplace, three things had to happen: price had to be reduced, the hardware's reliability and "user friendliness" had to increase significantly and the legality of dish ownership by private citizens

needed clarification. The entry of several larger manufacturers achieved the first two conditions rather easily: the price of a complete DTH system rapidly fell from the $10,000 level in 1980 to under $3,000 by 1985. At the same time, the overall reliability of the hardware improved dramatically as the early systems transitioned into stylish state-of-the-art microprocessor-controlled video tuners the size of a VCR. As for the legal status of the DTH industry, President Ronald Reagan settled by signing the Cable Act into law, clarifying each citizen's right
to won a satellite dish and establishing the legal structure by which program providers could require dish owner to pay for reception of services. The year 1985 will be remembered as the best and the worst year ever in the DTH industry. From a shipment perspective, satellite TV was hot - some 735,000 systems were produced in the United States. Some months in the latter part of the year saw in excess of 80,000 units sold. An industry which began the year with less then a million consumers ended the years with over 1.7 million satisfied customers. Indeed, to the outside observer, the DTH industry appeared one of the hottest technology bets available. In fact, success was setting the industry up of a dramatic tumble - one which would take years to overcome.

The industry found itself out of control. Hundreds of new dealerships were opening every month - with many new retailers having little, if any, true understanding of the product or long term commitment to the business. In fact, the satellite dish had become the "pet rock" industry of the year. This happened in an environment where programming was free - consumers made a onetime hardware purchase and enjoyed more than one hundred channels of high quality video, including every basic and premium cable service at no charge. Throughout the year several cable programming services announced plans to encrypt their satellite feeds under the authority granted by the 1984 Cable Act. Unfortunately, many retailers refused to believe that signal scrambling would occur.

January 15, 1986: The DTH World Changes Forever

January 15, 1986 began like any other day in America, and business was good for satellite retailers. As the day passed, video on HBO was replaced by scrambled lines and audio was gone. At that moment, the "hardware-based" DTH industry transitioned and was now driven by the sale of "software" (programming). As the news of scrambling hit the national media with inaccurate statements like, "...the skies have gone dark for dish owners," many cable operators depicted satellite dishes as expensive and ugly contraptions which now at best would make for Olympic-sized birdbaths. The DTH industry was staggered like a journeyman fighter who had just tasted the leather of a George Forman uppercut. The first blow was wholesale defection of retailers, followed by a bitter internal industry battle over scrambling which soon saw existing DTH system owners drawn into the "fight to preserve the free airwaves." Worse yet, the industry allowed this battle to spread to new consumers as they entered dealer showrooms to consider the purchase of a dish. It even gave birth to three nightly satellite-delivered talk radio networks (one hosted by this author) dedicated to discussing/debating the changing industry. The political fireworks generated by these shows demonstrated the fact that the industry was approaching a "meltdown." Impact on sales of new DTH systems was dramatic. The industry plummeted from 735,000 systems in 1985, to 225,000 units in 1986. An estimated 60 percent of retailers left the industry by year end. Clearly, the DTH industry was rapidly approaching a "fork in the road" on the way to survival or oblivion.

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