Not the End of the World
Call it a silver lining in the storm clouds. The cup is half full, not half empty.
With satellite launches in the past week, it could've been worse.
DIRECTV 11 was successfully lofted into space Wednesday afternoon. And while the AMC-14 satellite missed its orbit during a launch last Friday, the satellite is not a complete loss. Satellite manufacturer Lockheed Martin and its customer SES AMERICCOM have engineers exploring various options for placing AMC-14, designated to support an expansion of DISH Network's high-def services, into the correct geostationary orbit.
There are no guarantees the satellite will be a complete save. But the fact that it's operational suggests the satellite business batted a little better than .500 on launches in the past week.
Nonetheless, satellite industry competitors jumped on the AMC-14 launch, saying the business, and its reliance on a space-based platform, isn't all that reliable. And the (better than) 50/50 launch success this week comes as DBS companies expand their respective platforms for delivery of HD services.
There's no doubt the satellite business is exposed to vulnerabilities. After all, satellites suffer through a rocky, powerful launch from Earth and must survive in a hostile space environment that dishes out everything from meteor showers to intense solar activity.
But even with the AMC-14 anomaly, it's not the end of the world for the satellite TV business.
Both DIRECTV and DISH Network have a lot of space-based resources already in place. The companies own their satellites and also lease capacity from commercial satellite companies. There is some flexibility in the model.
DISH Network has plans to fly two more satellites this year. DIRECTV 12 is under construction and will be ready for launch in the second half of 2009.
And the companies continue to seek out other spectrum resources. DISH Network struck a deal with Bell ExpressVu earlier this month for access to capacity aboard a Nimiq satellite.
While the pieces of the capacity puzzle are in place, that doesn't mean it will get easier any for the small dish product. Now that the companies plan to deliver all of those local HD channels to markets under a new carry-one, carry all must-carry regime, both DBS platforms will need to further expand in space. And while the phased-in HD locals process covers a four-year period after the nation's switch to digital TV next year, it's certain that the companies have already started planning for the extra resources.
Yet given the economics of a national footprint to deliver services, folks can bet the DBS services are here to say … and vigorously compete.