Date: 8th February 2001
Pointing to a significant slowdown in consumer demand for satellite TV services, analysts are raising doubt over the wisdom of Rupert Murdoch's planned strategy to merge News Corp's satellite businesses with Hughes Electronics' DirecTV, the New York Times observed today (Thursday). Some analysts see the slowdown accelerating unless the economy itself reverses course. "In an economic downturn, consumers will be less inclined to invest in what some see as luxury home entertainment," SG Cowen media analyst Robert Kaimowitz told the Times. Another analyst, Richard Read of Crédit Lyonnais Securities, took note of the attractive come-ons that U.S. satellite service providers are offering, including free or discounted receivers and free installation. "Satellite companies are spending huge amounts of money to acquire subscribers," Read told the Times. And although Murdoch "is always good at creating value ... it is a question of how long it takes." Meanwhile, News Corp on Wednesday reported a net loss of $23 million in its last quarter -- the result primarily of a writedown of costs related to restructuring its partnership with the Internet site WebMD.
Source: Studio Briefing