Satellite Television Corp. may be forced to accelerate its existing plans for launching a direct broadcast satellite in 1986 as a result of Rupert Murdoch's sudden entry into the pay television field, company sources said yesterday.
STC, a wholly owned subsidiary of Communications Satellite Corp., has been "studying the possibility of early entry" into the satellite TV market for some time, according to Vice President Judith Shannon. "Our desire for early entry relates to operational logistics, dealing with customers and other aspects of the business," Shannon said.
She conceded that the existence of competition creates strategic as well as operational concerns. Another STC source, who asked not to be named, emphasized that "this puts a lot of pressure on us for early entry this year." Shannon said that STC will decide by the end of 1983 whether to accelerate its DBS plans. STC is not negotiating with anyone for a market entry at this time, she said.
Through a joint venture with Inter-American Satellite Television Inc. and Murdoch's News America company--which owns the New York Post, the Boston Herald and other magazines and newspapers--the satellite pay-TV service will provide five channels of programming at costs comparable to monthly cable television fees, according to News America President Donald Kummerfeld. He said the cost would be approximately $20. The venture will use the communications capacity of an existing satellite.
The service is targeted at rural areas and and areas not easily served by cable, a market that Kummerfeld estimates at 14 million to 15 million homes. "We're in the midst of firming up our marketing plans," Kummerfeld said. Although the venture initially plans to focus on the rural market, "You'd be foolish not to try to maximize your audience as quickly as possible," he added.
Kummerfeld would not reveal specifics, but it is believed that the dish-shaped antennae needed to receive the satellite signals will be manufactured by a joint venture of Nippon Electric Corp. and Aluminum Co. of America.
Ironically, the satellite capacity that Murdoch is leasing for $75 million for six years comes from Satellite Business Systems of Mclean. Communications Satellite Corp., which owns Satellite Television Corp., is also an owner of SBS, along with International Business Machines Corp. and Aetna Life & Casualty. In effect, Comsat, through SBS, therefore is providing the satellite capability that permits Murdoch to compete against its own direct broadcast subsidiary.
"STC will compete aggressively," Shannon said.
The Murdoch move also is expected to affect United Satellite Communications Inc., another direct broadcast satellite company, which plans to use a Canadian satellite to transmit its programming.