Business The Salina Journal Sunday, January 26,1986 Page 6 Satellite dish industry says sky's the limit By JUDITH WEBER Staff Writer The cover of the 1978 Neiman- Marcus Christmas catalogue pictured a backyard satellite antenna system with a price tag of $36,500. The 20-foot dish could pull in about 30 channels. That beginning sprouted a grass roots industry that has supplied about 1.5 million American homes with satellite antennas. About 28,000 dot the Kansas landscape, with 700 to 800 in the Salina area. And viewers in Kansas are getting the best deal of all: About 17 satellites beam television signals to the nation, aiming their signals at the central United States. That gives Kansans the strongest signals. Today's satellite antennas are considerably smaller, more attractive, easier to use and produce a better quality picture than the early model sold by Neiman-Marcus. Salina satellite dealers say a good- quality antenna can be bought for less than $2,000 and users can receive about 150 channels. But the announcement by 16 cable television channels to scramble their signals so that satellite dish owners can't receive them without paying monthly fees, has raised uncertainty and disagreement about the future of the industry. Two of the channels, Home Box Office and Cinemax, started scrambling their signals Jan. 15. The satellite industry is still in its infancy, and large numbers of entrepreneurs have jumped on the bandwagon to get a piece of the action. "Everytime there's something new, everybody wants to jump in," said Charles Latham of Latham's TV & Satellite Sales and Service, 1819 S. Broadway. "There were people selling out of their garages, at filling stations, just on weekends." 1984 was a busy year, but sales slowed down last year, Latham said. The industry took a little time to reorganize, and many dealers and manufacturers went out of business and are continuing to do so, he said. Six to eight dealers in Salina have quit the business, and most of them were people who knew little about satellite antennas except how to install them, he added. "Now the ones left are in sales and service, and they'll be in the business a long time." Latham entered the satellite business about three years ago when he designed a steel mesh antenna, which is manufactured by Hedville Satellite Manufacturing. Jim Patterson of Jim Patterson Enterprises, 111 E. Pacific, also has been involved in satellite antenna manufacturing for about three years. His company produces Sky Sentry fiberglass dishes in 10-foot, eight-foot and six-foot models. Patterson has been involved in the manufacture of fiberglass products for about 15 years. About four years ago, he became a dealer for aluminum dishes before designing his fiberglass models. Patterson got out of retailing last April and has become a wholesale, full-line distributor of satellite systems, adding metal antennas and electronics systems. Production at Patterson Enterprises has reached 150 antennas a month, and that was about a year ago, he said. "Now we're at about 40 percent of what we should be." Patterson attributed the decrease to the economy and the scrambling issue. However, business has picked up since HBO and Cinemax started scrambling, which he said is probably because people are realizing that scrambling is not a big problem for dish owners. Latham said that's because the antennas pick up so many other channels that are not scrambled. "Even if (dish owners) lose all the pay channels, they'll still have 500, 600 movies a month," he said. Kelly Nestler, co-owner of Nestler & Son's, North Broadway and Thirteenth, has been a satellite dealer for five years. The business also is in the television and stereo repair business. When Nestler started, antenna systems were $7,000, and the business sold 13 in its first year. Last year, with comparable systems selling for $1,300, Nestler & Son's sold 110 antennas. Nestler said he expects to continue to do that volume of business. But Dick Shogren, president of Home Cable Inc., 2231-B Centennial Road, does not have optimistic hopes for the industry. Shogren got into the business by marketing a motor drive, the device that rotates the antenna from satellite to satellite. He developed the first digital motor drive, he said. Home Cable opened in 1979, making it one of the first satellite system businesses in Salina. But Shogren said he is phasing out his business, which may take about a year. "Sales in Kansas are not what they used to be. Last year sales decreased about 60 percent (from 1984)." He attributed the decline to the economy and the scrambling issue. Advertising by cable networks Walter Beuchaw, Tescott, sprays resin and fiberglas onto a six-foot satellite dish at Jim Patterson Enterprises. about the effects of scrambling have been misleading, Shogren said. Organizations like the Satellite Television Industry Association are beginning to do some counter advertising, which will help, he said. "But sales will never be what they were a year or two ago." Four or five years down the road, Shogren said improvements in technology will make three-foot dishes more practical. The smaller dishes have a sales advantage because they can be mounted on rooftops, are not as conspicuous and don't need a lot of concrete to stabilize them, he said. "It's a good industry. People considering buying antennas wouldn't regret it. They need not be concerned; the sky is not going to go dark." Latham agreed that even with some cable channels scrambling signals, satellite antennas are still worth buying. "The public is still ignorant of the fact of what's available. If everybody knew what satellites offered, cable companies couldn't keep one person busy," he said. In addition to television signals, satellite antennas also pick up about 50 audio channels, including classical and jazz radio stations. "When the cable companies came in, the television companies hollered. Now the cable companies are hollering," he said. Latham said he doesn't think many satellite dish owners will pay for the decoder needed to unscramble signals and the monthly fees the cable stations want to charge them. The price of the decoder is $300 to $400. Dish owners will be charged $12.95 a month each for HBO and Cinemax, more than city subscribers pay. The price, if a dish owner subscribes to both cable channels, will be $19.95 a month. "I think (HBO and Cinemax) are standing out there on thin ice, hoping .somebody will follow them," Latham said. Director adds humor to TV ads NEW YORK (AP) — Lilly Monkus and Joseph Levato have been leaving them laughing in recent months with their performances in television commercials for fast food, auto finance and power drills. The actor and actress do not possess the classic physical features many advertisers like to project in connection with their products. But they fit well with the humorous and award-winning approach that director Joe Sedel- maier has taken to commercial- making. Sedelmaier's fast-talking executive commercials for Federal Express Corp. and "Where's the Beef" ads for Wendy's International Inc. are considered industry classics. Monkus is the matronly model who carries a flashlight and a beach ball in her strolls down the runway in a Wendy's commercial parody of a Russian fashion show. And Joseph Levato is the rotund character in a third commercial who repeatedly climbs and descends the stairs to the basement in search of the proper electrical cord extension, only to collapse at the end of the day. Along with its awards and imitators, Sedelmaier's style has sparked criticism that his commercials rely on distorted caricatures. But the 52-year-old Chicagoan says he uses down-to-earth people with whom viewers can identify. He said the people who see them otherwise "are used to the plastic look ... Their idea of beauty is a Barbie doll." Monkus and Levato each said they like the roles they have played in Sedelmaier's commercials and are unabashed fans of his approach. Here are profiles of the two members of Sedelmaier's ensemble: Lilly Monkus The 38-year-old Monkus had been acting professionally for about eight years when she applied Joseph Levato and Lilly Monkus to Sedelmaier's studio. She answered a cast call for ethnic-looking women in mid-1984. At her audition, Sedelmaier asked her to say "sit down" in Polish. Her reply, "sect down," convulsed the group in laughter and she was on her way. For Wendy's "Fashion Show" commercials, Sedelmaier had planned to use three different models. But he decided while shooting it to use just one. "I got up there and I never came down," Monkus recalled. She walks up and down a runway three times in the same drab dress and babushka. The only difference is that when she models "evening wear," she carries a flashlight, and when she is in "swimwear," she carries a beach ball. "I loved the Wendy's lady," Monkus said. "She may not be beautiful in the way that we view it, but in this particular arena, she was the top banana. All eyes were on her." A Chicagoan, she has since done several other Sedelmaier commercials. "He takes the person that we all know and see every day, and puts them on camera. Everybody isn't Joan Collins," she said. Joseph Levato Levato was shopping in a grocery store one evening five years ago when he saw a woman eyeing him from a distance. "I thought something was wrong," the 59-year-old architect from Evanston, 111., recalled. As he turned to leave, he heard footsteps running toward nun. "I know you think this is crazy, but would you like to make television commercials?" the woman asked. Levato was skeptical, but told the woman, who was Sedel- maier's secretary, that he would think about it. Eventually, Levato's wife persuaded him to apply. He visited Sedelmaier's studios, and saw tapes of the director's commercials. "I just roared, and bet it would be fun doing it," he said. One of his first jobs was for Aamco transmissions. In that commercial, his television pops and smokes, his dishwasher overflows and his car drops parts on the roadway after hitting a bump — all before his inglorious return to the garage, which collapses on him. Levato found that Sedelmaier can be tempestuous on the set, but said, "I served in the Marine Corps in World War II, and didn't mind all the hollering and the shouting." Levato has appeared in about two dozen Sedelmaier commercials for sponsors including Alaska Airlines, Wendy's, Mr. Coffee and, currently, Black & Decker cordless power drills. Levato said he has had offers from other commercialmakers but refuses to work for anyone but Sedelmaier. He has also decided against leaving his job with a Chicago engineering firm to pursue acting fulltime. "There are just too many people in the group (of actors) I meet who say it is a hard way to make a living, and I see them struggle. As long as I have a decent job, I feel I should stick with it," he said. Latham said there is still a big market for satellite antennas. "It's something new; everybody will have one some day. We haven't even scratched the surface." Newton and Annetta Holcom of Route 2 bought a satellite antenna three months ago because they were "tired of watching just one channel." "We love it. We've never watched so much TV," Annetta Holcom said. "We stay up late at night, which we never did." Holcom said the family's favorite channels were HBO and Cinemax, and they were disappointed when the stations began scrambling their signals. She said they probably could afford the decoder, but not the monthly fees the cable channels want to charge. The family still enjoys other channels and the wide variety of selection available, she said. Patterson said he thinks the prices for the decoders and the monthly fees for satellite cable will have to come down before many dish owners will subscribe to scrambled pay-movie channels. Other channels will be scrambled, but in the next couple of years another 50 to 100 satellite channels will be added, bringing the total available to 200 or 300, Patterson said. New channels will help business, he said. But the scrambling issue isn't settled yet. Two bills have been introduced in the U.S. House of Representatives. One would impose a two- year moratorium on scrambling programming, and the other could require the Federal Communications Commission to establish prices, terms and conditions for backyard dish owners' access to scrambled signals. Nestler said some advertisers with cable channels also are lobbying the stations to prevent them from scrambling. Law would burst bubble of America's funding fantasies NEW YORK - The launch last week of Gramm-Rudman-Hollings — the law to balance the federal budget by 1991 — has so much wrong with it that it's unlikely to stand as written. But it's right in one overwhelming way. It ties up the President and Congress, and holds their feet to the fire. If they can't overcome their fantasies about federal revenues, the law will force reality upon them. And upon the American public, whose own illusions are the first cause of the dangerous budget stalemate in Washington. In the coming weeks you'll be reading much about what GRH risks- endangers-undermines. 'Alarms will be raised. Appalling outcomes will be pointed to, if the law is actually carried out. The alarmists will be right — and that is exactly the point. Congress and the President can't make hard decisions except in an atmosphere of crisis. G-R-H creates a crisis that must be risen to, lest the entire government become absurd. Only by agreeing on a rational budget can the irrational G-R-H law be overcome. The deficit is a creature of America's inability to choose. We as a people want a strong defense, acceptable programs for the poor, no cuts in major government-support programs like Social Security, and lower income taxes. We elected a President who said we could have it all. And we still want it all, despite the clear evidence that the arithmetic — financial and political — doesn't work. The combination of higher spending and lower taxes has doubled the national debt to $2 trillion during the Reagan years and created the first-ever rising deficit during an economic recovery. Hence Gramm-Rudman-Hollings. Under the new law, Washington must write a budget that reaches specified budget targets. If the President and Congress can not agree on what those should be, Gramm-Rudman-Hollings takes over and makes the cuts automatically. Among the law's re- Jane Bryant Quinn WASHINGTON POST suits: (1) It loads major budget cuts onto a small fraction of federal spending programs. In theory, all programs are to be cut alike, in order to spread the pain. But in practice, this year, 79 percent of the budget will be exempt. No cuts are allowed in Social Security benefits; in military salaries; in certain government contracts; in several low-income programs, including welfare and food stamps; in interest on the national debt. So all of the mandatory G-R-H cuts have to come out of the final 21 percent of the federal budget — touching hundreds of programs, for millions of Americans: rivers and harbors, new drug approvals, some military contracts and weapons development, the space program, the FBI, air-traffic controllers, the national parks, farmer support, education, health. This year, only $11.7 billion has to be cut, which will be hard but doable (Specific cuts will be announced Feb. 3, to take effect March 1.) But next year, G-R-H might force deficit reductions of $65 billion or more — which could cut some programs below the level needed to do the job. (2) The law fails to discriminate between essentials and frills. This year, all eligible domestic programs — regardless of worth — will be cut 4.3 percent and all eligible military programs, 4.9 percent. Lean, well-run programs take the same hit as sloppy, inefficient ones. Programs central to government, such as the courts and law enforcement, are treated the same as programs of lesser worth, such as the Small Business Administration. Programs already understaffed — air-traffic control and federal meat inspection — may be forced to un- derserve the public even more. No exceptions can be made, because that's the law. G-R-H operates mechanistically, without moral or financial judgment. The law produces ridiculous outcomes. Unless some adjustment is made the IRS could have its budget authority for tax enforcement cut by perhaps $153 million. Less enforcement would mean that around $2 billion in unpaid taxes will go uncollected, therefore making the budget deficit worse. These results are so absurd that, one hopes, the President and Congress will finally be forced into a Grand Compromise: more domestic spending cuts than Congress wants, more military cuts than the President wants, and higher taxes. Right now, the constitutionality of G-R-H is under attack. A lower court will make a ruling soon, after which the case will be appealed directly to the Supreme Court. But chaotic as the new law may be," I'd hate to see that weapon sheathed. Business failures show increase KANSAS CITY, Mo. (AP) — The number of business failures in Kansas last year more than doubled the number in 1984, according to preliminary figures from a credit- rating and research firm. Officials at the' Dun & Bradstreet Corp., a Kansas City area research firm, reported Friday that 1,578 businesses failed in Kansas last year, compared with 706 in 1984. The Kansas rate compared with a 10 percent increase in bankruptcies across the country, to 57,089. Kansas bankruptcy courts handled 5,506 new cases last year, and business filings accounted for 1,214 of the total.
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