Galaxy takes knife to fees

Galaxy launched its service in Perth two weeks ago with a $99 microwave distribution system (MDS) installation fee, resulting in a doubling of the month's sales target within four days.

Melbourne and Adelaide followed with similar discounts. The true price of installation is $550 for MDS and $1,150 for satellite-received services.

In Sydney, new subscribers to Galaxy's MDS service can be hooked up for $99 and those who paid $299 will be given $200 credit.

Galaxy is believed to have 10,000 subscribers nationally and has a target of 200,000 by the end of the year.

The figure has drawn a mixed response from industry analysts, some of whom describe the early penetration rate as poor by world standards.

Others say that while pay TV is well established in most industrialised countries, it is a new industry in Australia and it is too early to judge Galaxy's performance.

Galaxy's sales and marketing manager Mark Collier said the company was happy with numbers so far.

Subscriber figures are expected to increase with the introduction of Galaxy's satellite technology later in the year.

A satellite signal can reach 99 per cent of Australian households, many more than an MDS signal which can be blocked by buildings.

Galaxy is offering free subscription until May 1, as only four of its eight channels are available.

XYZ Entertainment is launching the other four Galaxy channels today. They are a documentary channel Quest, children's and cult TV channel Max, general entertainment channel Arena and music channel Red.

XYZ executive producer Paul Melville agreed it was difficult to persuade viewers to subscribe to a service sight unseen.

"I wouldn't spend money on something that I haven't seen so I can understand why people are reluctant to subscribe," he said.

"But as soon as they can see it, they'll buy it."