Solutions Research Group

by Ellen Roseman
The Toronto Star
Aug 03, 2003

When the first home-grown satellite TV service was launched in Canada in 1997, it cost about $1,000 to buy and install a dish and receiver.

Satellite was considered a niche market, suitable mainly for rural households with no access to cable TV. Critics laughed at Bell ExpressVu LP's business plan to sign up 1.5 million customers within six years.

Today, ExpressVu has 1.33 million Canadian households, just short of its goal, and still shows double-digit growth.

"We're 14 per cent ahead of where we were last year in the same period," says Bernard Asselin, senior director of acquisition.

Star Choice, owned by Shaw Communications Inc. of Calgary, is Canada's only other licenced satellite TV provider. It has 800,000 customers.

Cable TV still has a big lead, with eight million Canadian households signed up. But satellite is gaining fast with more than two million households ? and no one knows for sure how many households have "gray market" satellite dishes that get programming from the United States.

In Toronto, you now see satellite dishes on many homes and apartment balconies. A basic dish and receiver costs $99 to buy ($199 if you want receivers for two TV sets). The installation cost is $99, but both ExpressVu and Star Choice offer free installation for the month of August.

Why switch from cable? The top reason, Asselin says, is the crisp picture quality a digital system offers ? "for the first time in your life, you'll find out the grass is green on TV" ? and the "crystal clear sound" ? a boon when watching music programs, such as last week's Rolling Stones concert in Toronto.

Satellite also offers flexibility when it comes to programming choices. You don't have to pay for channels you never watch.

Cable providers are fighting back with their own digital TV packages. The channels are similar to what you get with a satellite and the equipment can be rented, instead of purchased.

Rogers Cable Inc. rents a digital set-top box for $8.95 a month. You get access to free in-home service, says spokesperson Taanta Gupta, and you can upgrade if a new generation of digital terminals comes along later.

If you want to own a digital cable box, you can buy one for $249 from Rogers or $199 from the Future Shop electronics chain and plug it in yourself at home. You don't need professional installation, as with a satellite system.

The digital TV market has tripled in the past three years. Today, 34 per cent of Canadian households have digital TV (20 per cent satellite and 14 per cent digital cable). Half of Canadian households still have analogue cable.

The figures come from a study released last month by Solutions Research Consultant Group Inc. of Toronto.

The study can be found at http://www.inthenameofcool.com. Among its highlights:

The typical satellite household spends $55 a month on television services and receives more than 100 channels. A digital cable household spends $60 for just over 90 channels. In comparison, those in analogue households report spending $40 a month for fewer than 50 channels on average.

The digital TV market has tripled in the past three years to 34% of homes

Digital households are wired in other ways as well. They're more likely to have personal computers, DVD players, video game systems and digital cameras.

Bell ExpressVu rated higher in customer satisfaction than Star Choice and major cable TV distributors.

When asked how happy they were with their TV provider, 53 per cent of satellite subscribers said they were "very satisfied," compared to 46 per cent of digital cable subscribers and 37 per cent of analogue cable subscribers.

Satellite and digital cable subscribers feel they get better value for their money, said study director Kaan Yigit. "A family can double the number of channels they receive without doubling their monthly cost."

Heck, even our family has caught up with the digital revolution. Last summer, we took home a digital box from Rogers and signed up for a package of movie channels.

We already had high-speed Internet from Rogers, so we bundled the two together. The monthly cost is $111.99, up from $109.99 after a price increase that took effect on Aug. 1. (The cost of renting a digital terminal is included.)

Bell ExpressVu has gone after the same market and undercut Rogers' price. Its bundled satellite TV and high-speed Internet (from Bell Sympatico) is $99.95 a month.

But watch out for extra charges. The satellite dish costs $49 and there's a $2.99 monthly "system access fee" added on May 1, shortly after ExpressVu put through a similar price increase. (Star Choice has no such fee.)

Bell needs the system access fee, similar to what it has on long-distance telephone bills, to cover its $1.5 billion investment in satellite technology, Asselin says.

ExpressVu isn't making money yet and neither is Star Choice. They're both looking for ways to increase revenue, such as the $4.99 monthly charge for multiple receivers in the same household added last year.

Rogers Cable charges $6.99 a month for extra outlets, but you can get up to four in total. ExpressVu charges $4.99 a month for each extra receiver, while Star Choice charges $4.99 for all receivers after the first (unless you buy a deluxe program package).

It's obviously tricky to compare prices and offerings among TV providers. At Bell's Web site, http://www.bell.ca, you can try the live real-time Web chat. I found their answers slow and scripted: "Bell is working to constantly add more channel line-up to satisfy our customers' viewing experience."

But when I tried calling ExpressVu (1-888-SKY-DISH), I was warned of higher than usual volume and waits of more than 10 minutes to speak to a live person.

Things are simpler if you want a no-frills basic offering. You'll pay $23 a month at ExpressVu and Star Choice. And as of Aug. 1, Rogers Cable has raised its price in Toronto to $22.99.

Next week, we compare prices of long-distance telephone services

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