Alternative television companies are cutting into the cable television market in Prince George's County, county officials said this week, and as a result, revenues to the county and its two exclusive cable franchise holders will have to be lowered.
The alternative companies generally offer fewer services than cable TV for a higher monthly fee. They deal directly with county property owners, primarily apartment complexes, and distribute programming via microwave links or satellite dish antennas.
They can deliver service faster than the cable franchise companies, Storer Cable in northern Prince George's and Metrovision Inc. in the southern half of the county, because cable operators must string expensive cables above and below ground after they have negotiated for rights of way through the county.
"The satellite companies are really going after the apartments," said Howard Stone, executive director of the Prince George's Cable Televison Commission. "I'd say 20 percent of the market now--and it could be higher," Stone added.
Competition from alternative companies is not only a problem to Prince George's operators. Cable companies franchised in Montgomery and Fairfax counties have secured permission to offer satellite dish-antenna service to be competitive with the independent companies. Storer Cable Communications in Prince George's has also won permission to compete on this basis.
The independent companies have made their greatest inroads in the more densely populated northern section of Prince George's where apartment complexes are plentiful.
In the northern franchise, awarded to former county executive Winfield Kelly's Storer Cable in November 1981, a loss of 25 percent of the market to alternative companies would amount to $241,000 from first-year revenues. (The county, which gets 5 percent of a company's gross receipts, would lose about $12,000.)
Right now there are some 13,000 county households (out of 55,000 potential households) subscribing to Storer cable, almost all through 19 municipal franchises Storer won before getting the entire northern county franchise.
These municipalities include Berwyn Heights, Bladensburg, Bowie, Brentwood, Cheverly, Hyattsville, College Park, Greenbelt, New Carrollton and Riverdale. Storer is about on schedule with its original predictions for service.
In the southern half of the county, Metrovision of Prince George's is currently serving about 180 households, according to Metrovision officials, but by the end of August, cable should be available to more than 17,000 southern county homes, according to the company's building timetable. The county can assess penalties of up to $5,000 a day if the timetable for either franchise is not met.
Meanwhile the alternative companies, using services known as Satellite Master Antenna, Multipoint Distribution and Subscription Television systems are currently serving between 17,000 and 20,000 homes in the northern half of the county, Kelly estimated.
In the southern part of the county, the alternatives are serving at least 5,000 homes, according to a spokeswoman from Metrovision.
One of the independents, Marquee Television Network, which distributes the popular movie channel Home Box Office, says about 7,000 households in Prince George's are paying $16.95 a month for that service.
Storer, by contrast, offers HBO (or up to five other premium services) plus some 72 other channels including 24 hour sports, news, and other specialized programming for $13.90 a month.
The independents argue that the cable prices have been set at an artificially low price, in order to secure a monopoly over county rights of way.
Prince George's County collects 5 percent of the revenue from county-wired cable for financing an institutional network for schools, public and government access channels, and cable commission expenses. The county gets no share of the revenue from municipal franchises.
Last week Kelly presented the county with its first check, $1,158.92, for the six months that ended in January, based on revenues of $23,000 from 421 subscribers to the county system.
According to the original Storer proposal, there should be over 10,000 subscribers providing $967,000 to the company by the end of the first contract year, July 15. Most of those subscribers, however, live in municipalities that awarded Storer an individual franchise, and the county will not pick up any revenue from them.
Thus the county has lowered its projections of how much money it will take in by July--both because of service lost to municipalities and competition from independents--from $84,000 to $60,125.