Communications Satellite Corp. said yesterday it has pulled out of a venture to develop an 80-channel television system that will beam movies and sports to viewers via satellite.
A spokesman for Washington-based Comsat said the company could not agree on financial terms with its partner in the venture, SkyPix Corp., and that SkyPix had not demonstrated the technology supporting the system. "We kept asking to see it and we never did," said Richard McGraw, Comsat spokesman.
But SkyPix President Brian McCauley said the two companies disagreed about which party would control the venture, and he questioned Comsat's ability to commit as much as $120 million to launch the new service. He also said Comsat executives had seen the system's technology and had praised it.
SkyPix, a start-up company based in the Seattle area, has been seeking about $300 million, as well as technical support, to launch its direct-broadcast satellite (DBS) system next summer. As envisioned, the system would broadcast programming to homes equipped with $700 receiving dishes measuring about two to three feet across. The system is designed to offer a broad menu of movies and live sports events at a cost of about $3 or $4 per viewing. Comsat tentatively agreed in October to back the proposed system.
The SkyPix system is considered the most advanced of several DBS systems under development that would offer competition to video retailers and cable TV operators. SkyPix's system is based on a technology that compresses video images so that as many as eight signals can be relayed by a single satellite transponder unit. This so-called compression technology is considered more cost-effective than current satellite TV relays.
McCauley said Comsat was one of several investors interested in SkyPix and that discussions with the other investors are continuing. Comsat said it is exploring other DBS systems.