Saturday, July 24, 2010

Automatic Success?

There really is no key it an instant, or automatic success.

In the 1967 movie, "The Graduate" Dustin Hoffman was told that the business to go into was Plastics. But not all companies in the plastics industry were successful.

If the movie was remade around the turn of the century, Dustin would have been told to go into the Tech business, after we survived the Y2K scare.

Again, it takes more than the right industry to be successful as this article from explains:

Over the last 30 years there have been several satellite companies that have had their share of struggles as they tried to be the first to master this technology and monetize it by bringing key home services to market (satellite TV, radio, and Internet specifically). Some companies made it through their turbulent times like Sirius XM and others just died a silent death like Primestar (absorbed into an industry giant). We thought it would be interesting to take a look at 10 satellite companies that failed miserably. If you think we need to add more to the list, place a comment and let us read your arguments.

  1. Sirius XM – Sirius Satellite Radio and XM Satellite Radio merged in 2007 to become Sirius XM. When they combined they had over 18.5 million subscribers and growing. They seemed to be the invincible king of satellite radio until they issued a warning for the company to prepare for Bankruptcy in February of 2009. Eventually this led to them being owned by Liberty Media (which owns 49% of DIRECTV). All of the Sirius XM broadcasting was cancelled and replaced with offering from SonicTap.
  2. Iridium, LLC – This is a satellite phone company that was originally founded in November of 1998 and the first Iridium call made was by then-Vice President of the U.S., Al Gore. They launched their satellite (and some spares) and it was a rocky start by 1999 they were in chapter 11 bankruptcy. Today they are doing better with quite a few subscribers (over 320,000) and are bouncing back. So this one is definitely not a complete failure, it just failed at least once out of the gate.
  3. Primestar – This was a really good satellite TV service that failed and eventually sold its assets in 1999 to Hughes Network Systems which later evolved into DIRECTV. They originally broadcasted in analog but converted over to digital technology before eventually losing the battle for subscribers to DIRECTV and Dish Network. I actually was a Primestar customer and really resented being forced to move to DIRECTV.
  4. ASkyBAmerican Sky Broadcasting was a joint venture of NewsCorp and MCI Worldcom. They were at one point being courted by Primestar and would have possibly kept Primestar alive. There is nothing specific about ASkyB that makes it a failure aside from the opportunity to keep a third viable satellite television provider alive. The assets were purchased late in 1998 by Echostar (Dish Network).
  5. AlphaStar – This was a direct-to-home satellite TV service for the U.S. developed by a Canadian company called Tee-Comm Electronics. It started in July 1996 and got up to about 40,000 subscribers before finally succumbing to bankruptcy in September 1997. It had a short life and you can read more about it here.
  6. St.GIGA – in 1990 they became the first satellite radio company in the World and regular broadcasting really commenced in 1991. This was partially supported by Nintendo and they broadcast only in Japan. Unfortunately despite even venturing into gaming, they just couldn’t make a go of it and eventually its satellite broadcast certificate was revoked.
  7. Globalstar went through a chapter 11 bankruptcy in 2003 but was originally launched in 1997 as a joint venture between Loral Corporation and Qualcomm. After the restructuring and emergence of a new primary owner in Thermo Capital Partners, LLC though Globalstar, Inc. was born and remains a fully functional organization with over 300,000 subscribers. It mainly focuses on satellite phone and some data usages.
  8. VOOM – What is really interesting about VOOM is the fact that it was actually launched by Cablevision (yes the cable TV giant). There was apparently a big dispute in 2005 between Charles Dolan (the founder of Cablevision) and a few board members who wanted to shutdown VOOM. It resulted in the servicing being shutdown later that year and the assets being sold to EchoStar (Dish Network).
  9. United States Satellite Broadcasting (USSB) – This was founded by Hubbard Broadcasting in 1981 (specifically by Stanley S. Hubbard). This was one of the first satellite television companies and considered by most to be the pioneer in the industry. They broadcast most of the major American premium channels and really made a name for themselves. It never really failed but eventually was absorbed into DIRECTV. So the only real failure is not getting credit for what they accomplished and then later being dissolved into another system.
  10. Protostar went bankrupt in June of 2009 (filed for chapter 11 protection). The largest customer of this satellite company is Dish TV India Limited, the largest television operator in India. Eventually it went up on the auction block later in the year (October 2009) and was purchased by Intelsat Corp. for $210 million. It obviously had valuable assets but couldn’t capitalize on those assets.

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