Sat-ND, 14.12.96

Sat-ND 96-12-15 - Satellite and Media News

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This issue is sponsored by TELE-satellite, Europe's Satellite Magazine 
Have a look at their homepage! >> http://www.TELE-satellit.com/ <<


DMX sells off DMX Europe
Pay-radio company DMX Inc. will sell its loss-making European subsidiaries
DMX Europe N.V. and DMX Europe (UK) Limited to Jerold H. Rubinstein, DMX
Chairman and Chief Executive Officer.
DMX Inc. will keep a ten percent equity interest in the companies which
would have an exclusive, five-year, royalty-free license to use DMX's music
service in Europe, the former Soviet Union, and in the Middle East. DMX
Inc. had previously determined to cease financial support for its European
operations and, in the absence of some other arrangements to provide
financial support to those companies, to place them in receivership. (In
plain words: they're more or less bankrupt, but anyway supervised by an
Official Receiver -- which by no means is an electronic device but an
official appointed by law.)
Mr. Rubinstein has agreed to provide a guaranty of certain obligations with
respect to a new satellite contract in order to maintain the satellite
connections necessary to continue the DMX(R) music service in Europe and
the Middle East. Currently, DMX is transmitted via one of NASA's TDRS
Mr. Rubinstein will seek to reorganise the operations of the European
companies, and expects that the present creditors and suppliers of the
European companies will take significant equity positions. The European
companies will also seek new equity investors. If the existing companies
cannot be reorganised, then Mr. Rubinstein intends to organise a new
company to distribute the music service on essentially the same terms.
The move comes during DMX's negotiations with U.S. cable giant
Tele-Communications, Inc. (TCI.) A merger agreement is expected within the
next 30 days now that the obstacle DMX Europe has been removed. TCI let it
be known earlier that it was not interested in either financing or
otherwise continuing the operations of DMX's European subsidiaries.

AMSC 1 defunct
Insuring companies as well as AMSC Subsidiary Corp. and Lockheed Martin
Corp. have filed a complaint against technology corporation Spar Aerospace
Ltd from Ontario, Canada in the Superior Court of California. They ask for
US$135 million for the failure of the mobile communications satellite AMSC
1, claiming it was caused by defects in the communications payload, which
was supplied by Spar. 
The satellite was launched successfully in April 1995, commercial services
were inaugurated last January when U.S. Vice President Al Gore kicked off
the ceremonies with a live phone patch from the White House. Since then,
nothing was heard of the satellite that was to offer "a full range of
satellite-delivered mobile communications including telephone, fax, data,
and position reporting services to the transportation, land mobile,
maritime, aeronautical and fixed site markets" from its geostationary
position at 101W.
Spar said its insurers ''have been put on notice." The company announced it
would "vigorously defend" the claim should it go forward.

Digital problems?
New-York based Personalized Media Communications L.L.C. filed a complaint
against some manufacturers of digital satellite system receivers sold in
the USA. Allegedly, the import and sale in the U.S. infringes on a patent
the company owns. The company has asked the International Trade Commission
(ITC) to bar the sale and import of such products in the U.S. The case will
be referred to an ITC administrative law judge, who will schedule and hold
a hearing.

China's space industry performs another historical feat
Well, it may not sound too exciting that a four-staged "No. 2 Long March
cluster rocket" is for the first time displayed in Honk Kong during a
nine-day exhibition in Victoria Park. The US$100-million vehicle weighs in
at 30 tonnes and is 50 metres high. It was shipped from Zhuhai, a coastal
city in South China's Guangdong Province, to Hong Kong last Wednesday.
So, what's the historical feat then? According to news agency Xinhua, "the
rocket is exhibited horizontally, instead of vertically as before." 
Observers remarked earlier that this had turned out to be its favoured
flight direction when used for satellite launches lately.

G'day Australia! Here's something for my 16 or so readers down under, but
it should be interesting enough for anybody around the world confronted
with digital TV. Enjoy!

Oz Pay TV... too many hands?
A stroll down our suburban Sydney street finds four Pay TV delivery
systems. Galaxy satellite, Galaxy MMDS, Foxtel underground cable (which
also delivers Galaxy) and Optus overhead cable. With a combined connection
rate of 10-15%, it's easy to see that recovering the cost of infrastructure
will take a very long time, if it ever will be achieved.
Pay TV providers have found out what they should have known. Australia is
just not the TV culture that Europe and North America are. The novelty of
lots more TV to choose from but not much to watch soon wears off, and the
A$40-50 monthly bill gets cancelled. Most popular channel: Nickelodeon.
Best value for money: Australia's five channel free to air service.
Marketing Pay TV has been a disaster. A$20 or even free connection with the
first month free and no contract was of course intended to get 'em hooked.
Instead, thousands of homes simply took the free trial and did not go on
with the monthly payments. One Sydney branch reported a net month of 600
cancellations (i.e. 600 on, 1200 off). As only the decoders are retrieved
from disconnects, there are thousands of dishes and MMDS antennas on roofs
plus Optus drop cables doing nothing. 
An exception to this scenario is CETV (recently renamed Austar) who deliver
the Galaxy package to regional and country areas. In charging A$400-600 for
the installation, their penetration was slower. But as the connection was a
well considered financial decision anyway, churn rates are negligible.
Almost two years of Pay TV in Oz have seen a very expensive struggle for
acquisition of territory, and Australians expected much more than recycled
US ho hum for their money. Mike Willisee, well-known ex-current affairs
presenter and media mogul, offered a calculation for his non investment in
Pay TV. If UK Pay TV with half as many free channels and four times our
population went broke, then Australia was eight times more likely to fail.
Data, telephony and additional services in the (maybe) near future could
help, but right now there are too many players in the game. Mergers are on
the horizon, who will survive even when US backers call 'cost neutral' or
'show us a profit'.
Geoff Clifton <gclifton@ozemail.com.au>

[Thanks very much, Geoff, great stuff! I'll scratch your back in turn. If
anybody is looking for a professional antenna service in Sydney, Australia:
Contact Geoff at telephone 612 9694 1149, fax 612 9694 1062 or mobile phone
0418 244 775. Or just turn your steps to 9 Endeavour Ave, La Perouse NSW
2036. No, I'm not at all ashamed of this plugging. Just send me YOUR
contribution ;-) -- Ed.]

By Dr Sarmaz <DrSarmaz@aol.com>

Rupert hasn't given up on Time Warner deal
Is Ted Turner back on Lithium? Executives from Mr Murdoch's Fox Network and
Time Warner indicated the bitter dispute over cable systems may soon be
ended with a compromise. "We're still hopeful that we'll be able to get a
deal with Time Warner at the end of the day," said William Sorenson, vice
president for finance and banking at News Corp. "Rupert hasn't given up on
Jeffrey Bewkes, chairman of Time Warner's subscription-TV network HBO,
pointed out that "We're doing business with them." Referring to News
Corp.'s international satellite TV operations, such as Star TV in Asia, he
added that "We are partners in that sense." 

Copyright 1996 by Peter C. Klanowski, pck@LyNet.De. All rights reserved.

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