Stephen Blum, president of industry analysts Tellus Venture Associates, forecasts a buoyant future for DirecTV and Echostar’s DBS services over North America. He says that DBS, despite cable’s massive penetration in the market, will eventually gain a 40 per cent market share of TV homes. Blum predicts this year the DBS market will top 3 million net new subscribers. Moreover, he says the widespread introduction this year of IRD’s with built-in ‘recording’ hard drives, (DVRs) might well prove to be the elusive ‘Killer Application’.

Blum said interactive services that provide instant football scores or generate e-commerce applications through the TV set, while useful, “are definitely not the killer app. DVR’s could be.”

Blum’s forecasts are significantly ahead of most recent predictions (the Bear, Stearns & Co predictions from 1998 are shown below) but seem to reflect generally accepted views in the market. And the recent addition of local television signals to DBS bouquets has helped sell subscriptions. Blum saidwhile it is still too early to be say specifically how much difference local signals have made to the take-up, the anecdotal picture suggests it can only improve the already attractive picture.

Either way, he said the greatest difference over this past year or so had been the speed at which existing US cable subscribers had switched to satellite. Indeed, he predicted that this year cable, despite its own digital introduction, will lose subscribers for the first time in its history.