Video Stores Feeling Pinch From Satellite TV Systems

Satellite television, with its pizza-sized dish, is taking a bite out of video-store rentals, said a survey conducted by Nielsen Media Research.

About 64 percent of satellite TV subscribers didn’t rent a video tape the previous three months, according to a telephone survey of 682 households in July that was sponsored by Satellite Direct magazine.

“Take this five or 10 years down the road and we are going to have to say bye-bye to Blockbuster,” the video-rental chain owned by Viacom Inc., said Phillip Swann, editorial director of Satellite Direct.

A similar survey of 3,200 households last November by Norwalk, Connecticut-based consultants Inteco found that satellite-dish owners - less than 2 percent of those surveyed - rented 30 percent fewer videos a month.

The video-rental industry, which had revenue of about $15 billion last year, said it isn’t threatened by the fledgling direct-broadcast industry, which is led by DirecTV. The General Motors Corp. unit has 1.7 million customers.

“The bottom line is home video can compete effectively with direct satellite broadcast and other systems,” said Bo Anderson, vice president of Video Software Dealers Association in Encino, California.

That’s partly because more than 80 million households own a video-cassette recorder and 65 million people visit a video store every week. Only about 2.5 million people receive satellite TV, with about 10 million expected to sign up by 2000.

That means there’s been no lack of customers seeking the latest films at Princeton Video in Princeton, New Jersey.

“I haven’t felt anything as of yet,” said owner Aaron Cane.