Satellite TV has a business model that is too good to be true. Results from Echostar and DirecTV would indicate that they are thriving in both subscriber and revenue growth. But, there are at least three competing businesses that will make the expansion of the satellite TV operators come at a much higher cost.Fiber-to-the-home. Today, telephone companies are happy to have partnerships with the satellite companies. Since they cannot deliver television signals to most of their customers, they telephone company can provide voice and broadband, and tie-in with the satellite guy for the TV piece. Once the Verizon and AT&T fiber networks are in place, they are competing with DirecTV and Echostar. And, the telephone company can bundle voice and broadband into the deadly triple-play to convert satellite customer to their platforms.Cable. Cable is the only real competition to satellite now. But, analog lines have restricted the amount of high-definition programming that can go into the home if the “pipe” is going to provide voice and broadband as well. There are technologies being developed that will solve that problem. At that point, cable goes from being modest competition to a formidable enemy.WiMax. Two years ago, WiMax appeared to be a technology developed by schizophrenics. But, with Intel, Motorola, and Samsung working the room, it would appear that WiMax will be available in a number of countries around the world including the US, where Sprint is building a $3 billion network for its 4G phones. South Korea is about to completely blanket Seoul, one of the world’s largest cities, with WiMax. In theory, WiMax could deliver a television signal to the home. The FCC would have something to say about this, but that does not mean that large enough license fees would not get those august commissioners to take a look at allowing WiMax TV for the right tool paid to Uncle Sam. WiMax does not have the “rain fade” issue that satellite TV has. In a big storm, the picture disappears. Completely. A lot of satellite TV customers, especially in places like Florida and Washington State, have rain almost every day.Satellite TV’s downfall eventually may be that it is uni-directional. It sends a signal down to the home, but does not take a signal back. The satellite people have set up a system where you can send data to them over a phone line, but it is, at best, a wacky contraption that customers would rather do without. The same people who may do without satellite TV all together.Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
Sponsored: Want to Retire Early? Here’s a Great First Step
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.