DirecTV Buys PrimeStar

With the January 22 announcement that DirecTV is slated to purchase PrimeStar Inc., the satellite television industry is on the verge of shrinking to only two players from five last year. Just last December 1998 DirecTV purchased United States Satellite Broadcasting (USSB) for $1.3 billion. The long-negotiated PrimeStar deal through parent Hughes Electronics Corporation, includes in the $1.82 billion purchase PrimeStarís 2.3 million subscribers and high-power satellite assets owned by PrimeStarís cable partners, Time Warner, MediaOne Group, Cox Communications, Comcast, General Electric and TCI Satellite Entertainment. DirecTV has more than 4.5 million subscribers, more than double the number for EchoStar Communications ñ now its next-closest rival and No. 2 satellite service provider ñ which has fewer than 2 million. The additional orbital capacity would add 90 channels, bringing DirecTVís total service to 370 channels. DirecTV envisions using the new capacity to deliver high-definition television channels and interactive services. It is not known to what extent how many PrimeStar subscribers will switch equipment to become DirecTV subscribers.