SelecTV has lost its contract with the channel that broadcasts the pioneering subscription TV service to 20,000 homes in Los Angeles.
KWHY-TV Channel 22 has decided to broadcast Spanish-language programming April 1 instead of the movies and sports offered by SelecTV. And while SelecTV executives are putting the best face on KWHY’s move, some experts predict that it could spell the demise of the long-struggling service.
“It’s probably the end of the road for them, certainly at Channel 22,” said KWHY President Burt Harris Jr. “Right now they owe us a lot of money, but we’re keeping them on in return for a minimum daily payment because subscribers are still expecting a service.”
“SelecTV will be on tonight,” Harris said Friday, adding “but only if they pay me by 5 o’clock today.” SelecTV leases air time from KWHY.
However, a spokesman for SelecTV countered that “we’re definitely going to be on tonight and tomorrow night and the night after that.” A spokesman for KWHY confirmed late Friday that the station had been paid and SelecTV “would be on through the weekend.”
KWHY will continue to broadcast the Business Channel from 6 a.m. to 3 p.m. on weekdays, followed by Spanish-language programming from Univisa Inc.
SelecTV President Thomas C. Hunt denied that the loss of the KWHY contract would mean the end of the service. According to Hunt, SelecTV is merely in a period of transition, converting from broadcast delivery to microwave distribution--what is known in the industry as a multichannel, multipoint distribution service, or MMDS.
The change will require the installation of new equipment in subscriber homes, he said, and will take several months. The equipment will be provided free to SelecTV by the manufacturer in exchange for a percentage of subscriber fees.
“We’ve informed our subscribers that we are offering a new service that we’re calling SuperselecTV,” Hunt said. “We are beginning conversions this month. We feel this is a very positive thing for us. MMDS is a growth industry, the wave of the future in wireless cable.”
Hunt said the company expects to have 2,000 subscribers converted to the new service by the time SelecTV’s contract with KWHY is up at the end of the month. He acknowledged that “we may lose some subscribers” during the transition, “but we’re highly confident that some of those people will take a new and better service back. We’ll take a dip and then go back up again,” he said.
‘Struggle to the End’
Larry Gerbrandt, a senior analyst for Paul Kagan Associates, a media research firm in Carmel, was less upbeat about SelecTV’s prospects. “I don’t want to predict anyone’s demise, but obviously this is a crisis situation.”
“Their job is to minimize the loss of subscribers,” Gerbrandt said of SelecTV management statements. “They have to try. You have to struggle to the very end and try to keep the business alive. As long as you have subscribers you can probably patch together some sort of service. Then it becomes a question of overhead and how many subscribers you lose.”
“Multichannel MDS could give them a new lease on life,” he said. “It’s doable and feasible, but it will require additional capital from somewhere. When you are day-to-day with all your (supplier) accounts, as I understand they are, anything incremental can be very serious.”
“They are valiantly trying to save themselves at the 11th hour, but my feeling is they are going out of business,” said KWHY’s Harris. “This isn’t a surprise to anyone; they’ve been losing subscribers for years.”
Indeed, when SelecTV merged with its rival pay TV service, On-TV, in 1984, the combined company boasted nearly 300,000 subscribers in the Los Angeles area.