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Capital, Technology and the US in an 'Open Market' 171
international operations, and to channel its resources into producing
and distributing a range of new information-based services. 33
Through subsidiary Hughes Communications, with its established
telesatellite capabilities, and its historic leadership in promoting direct
broadcast technologies in the United States, GM has established
DirecTV, North America's first high-power DBS system. As noted
above, its 150-channel capability has an advantage over many estab-
lished cable distributors in that it can already provide digitalized
services to its customers (whereas terrestrial systems will have this
capability no sooner than the end of the 1990s). 34 This provides GM
with a platform from which to provide the North American market
with a broad range of information-based services - including those
from its database and financial services subsidiaries - as well as a
continental medium through which its manufacturing interests can be
promoted. 35
Recognizing the potential transformative influence that a DBS
system can have on consumer demand and cultural practices in relat-
ively less developed regions, in 1993 News Corp. paid US $525 million
for a controlling interest in a Hong Kong-based, low-power DBS
system called Star TV. This investment was remarkable in that Star
TV itself projected that its losses would reach US $200 million by 1995
and that the first year of profit would not come until at least 2001.
Following an expensive upgrading of Star TV equipment- including
the launch of more powerful satellites and the application of signal
compression technologies - News Corp. officials believe that the
potential of Star TV to reach fifty-five Asian and Middle Eastern
countries justifies these expenditures. The most important of these
are India and the People's Republic of China (PRC)? 6
In the PRC, while state officials have banned the direct reception of
Star TV signals, variations in the local application of the ban and the
impracticality of tracking down privately held reception dishes have
contributed to the decision to develop and promote multipurpose
cable systems throughout the country. 37 As of 1993, an estimated
4.8 million Chinese households already received Star TV broadcasts,
while reception units are being sold to PRC citizens at a rate of over
10,000 each month. Having recognized the general impracticality of
controlling the direct reception of DBS transmissions, state officials
have negotiated with News Corp. executives to use selected Star TV
programing on these cable systems in order to exercise some degree of
censorship. As Star TV transmission upgrades increase the number of
channels available using smaller and more discrete household