They have been around for a couple of decades, clunky-looking status symbols from an era before Al Gore had even heard of the information highway. The sight of a 6-ft. satellite dish on the front lawn traditionally signaled one of two things: here is a house so far away from civilization that the cable company won't even bother coming, or here is a homeowner rich enough to afford the most expensive toy in the media supermarket.
That is changing fast. Direct-to-home satellite broadcasting is making a fresh bid for a share of the television market -- not just people in the boondocks but city and suburban dwellers as well who already subscribe to cable. A new generation of satellites, sending out signals over the high-power Ku-band (rather than the old C-band, which most current dishes utilize), combined with digital compression technology, has made it possible to bring in - many more channels with much smaller dishes -- the size of an extra-large pizza. With prices coming down too, home satellite dishes are becoming a viable alternative for viewers unhappy with cable. "There's no denying that a significant number of people have had it with the TV they're getting right now," says Eddy Hartenstein, president of DirecTV, the satellite-programming unit of GM Hughes Electronics. Enthuses satellite-TV pioneer Stanley Hubbard: "Once consumer expectations change, they never go back. Digital satellite is changing consumer expectations forever."
Cable finds itself in a vulnerable position because, at least temporarily, it is lagging behind in the perennial game of technological leapfrog. Nearly every major cable company is developing sophisticated new fiber-optic technology that will ultimately deliver hundreds of channels and permit full interactivity -- enabling viewers to order programs on demand, buy merchandise at the touch of a button and "talk back" to the set in a host of other ways. But this much vaunted technology is still years away from nationwide operation. For now, most cable customers must settle for 40 or 50 channels of traditional programming, technology that in many older systems badly needs upgrading -- and, in many cases, an annoying busy signal when they call their local cable company for service.
This has created a window of opportunity for potential rivals. (These rivals received a significant boost from the 1992 Cable Act, which requires that cable programmers like HBO and Showtime offer their services to any competing delivery system at comparable prices.) The oldest of these competitors is so- called wireless cable, which collects programming with large satellite dishes and sends it to homes via microwave transmitters. Wireless companies provide a low-cost alternative to cable in a number of cities, such as Houston, New York City and Cleveland, Ohio, but have traditionally been hampered by limited capacity (only about 30 channels in most systems). But wireless operators, like cable, are preparing to upgrade to digital technology, which could expand their capacity to 250 channels, making it more attractive to potential customers.