Satellite Dish Dealers Organize to Unscramble Their Image

Dozens of dealers and distributors for television satellite dishes in the Los Angeles area, complaining that publicity surrounding the scrambling of satellite signals is driving them out of business, have formed an association to fight back.

The group, which has not been named, raised pledges of several thousand dollars Wednesday night during an organizational meeting at an electronics store in Van Nuys.

Organizers said the money will be used to advertise the dealers’ message that satellite reception systems are not purchased primarily as tools to receive subscription television services such as HBO and Cinemax without paying for them.

HBO and Cinemax, which feature recent-release movies, last month began scrambling their satellite signals to prevent dish owners from receiving their programs without buying deciphering equipment and paying a subscription fee.

Dealers said consumer fear caused by the threat of widespread signal scrambling has seriously hurt their business.

One of the group’s two organizers, Michael Lerner of Van Nuys-based Satellite TV Systems, said his business was down 80%.

Others said their business was down 30% or more. Although most of those who spoke during the meeting at Muntz Electronics were from the San Fernando Valley, others came from other parts of Los Angeles and from Ventura and Orange counties.

Lerner blamed bad publicity for their problems. “They put out publicity that we’re crooks,” he said.

Contrary to that impression, Lerner said, satellite dish owners generally are seeking a greater variety of programming, through access to the more than 100 channels broadcast by satellite, and independence from cable companies.

“We have not sold our dishes on the promise that you’ll receive this or that cable system free,” Lerner said. “We never gave out the impression that you’re buying free TV.”

Another speaker predicted that scrambling will eventually “legitimize” the satellite dish business by eliminating the cheating issue.

“Our position right now is that we should pay for the programs that are subscription but at a price that is reasonable,” said William N. Brothers, marketing manager for Solir Satellite Supply Inc. of Van Nuys.

But not all the dealers rallied around that position.

Steve Banks, owner of a chain of satellite dish dealerships called Cable Busters, walked out midway through the meeting, protesting to the others: “You’ve surrendered.”

Cable Busters’ advertising slogan is: “It’s free. It’s legal. Why pay for cable TV?”

Banks was angered by a speaker who said he represented a company that intends to buy scrambled TV signals and redistribute the unscrambled signals to dish owners at a reasonable price.

“Whose side are you on?” Banks asked. “Are you on the side of the scrambling industry? We’re here because we don’t want scrambling.”

“I hear acquiescence to HBO,” said John Adler, agreeing with Banks. “I hear acquiescence that we should give HBO some type of tithe.”

Tim Mungovan of Pacific High-Tech of Van Nuys, co-organizer of the meeting, repeatedly tried to calm the air.

“We are not here to fight them,” Mungovan said, referring to the services that are scrambling their signals. “We can’t win.”

“I disagree,” Banks shouted. Then he cursed.

Several in the audience jeered “goodby” as Banks, with half a dozen others, then left the meeting.

Later, Bill Bartholomae of Satellite TV of Orange urged dealers to join a statewide organization of satellite dish dealers associated with the California State Electronic Assn.

But few liked the idea.

‘Set Out on a Destiny’

“I think we’ve got to organize and set out on a destiny,” one dealer said. “If we don’t do that, we’re going to be lost.”

After that, the dealers decided to rely on their own resources.

By voice nomination and mutual assent, about 50 dealers and distributors selected a board of directors for their organization to design a newspaper advertisement.

By Thursday, Lerner said, he had received pledges of $7,000 to pay for one ad or a series.