(3 of 3)
Media analysts forecast that the industry will pick up 8 million to 10 million customers by the year 2000. Early sales reports from DSS's initial campaign have been encouraging: according to the backers, dishes have sold out in the 41 states where they have been marketed, and 28% of the early buyers are cable subscribers. (Only 12% retained their cable after getting a dish.) Still, many industry observers are cautious. Tom Wolzien, an analyst with Sanford C. Bernstein & Co., a New York City investment firm, predicts that dbs might steal away 1% of cable's growth over the next five to six years -- "which isn't a killer." However, with the cable industry chafing under federal regulations that have put a cap on rates, any inroads could be damaging. "Even losing a few percentage points at the margins can have a significant impact," says Paul Bortz, a Denver-based telecommunications consultant.
At the very least, the aggressive new competition will provide an incentive for cable companies to improve service and hold down what they can charge. As for the long term, much depends on how quickly cable can deliver on the long- promised, fully interactive 500-channel universe. If it takes too long -- or consumer demand for such futuristic services turns out to be less than anticipated -- cable's rivals may succeed in grabbing a significant portion of the business. "Cable talks about the information highway," says Neal Bobrick, sales vice president of Soundtrack, an electronics chain that sells dishes. "But we are here right now."