[opendtv] DirecTv with HD

The future of HD at DirecTV


DirecTV Pushing HD Options
Firm Rushes Wide Range of New Offerings to Meet Holidays
By James Hibberd TVWeek.com


With high-definition television set prices in a sudden free fall, DirecTV is 
scrambling to 
implement an unprecedented array of technology and programming options in time 
for the 
holiday season to attract new HD subscribers. The News Corp.-controlled 
satellite provider 
has been launching satellites to expand its HD offerings and plans to soon roll 
out a 
proprietary HD receiver capable of processing next-generation MPEG-4 
compression streams, 
which will ease bandwidth constraints.

"Everything our retailers are telling us is that they expect this season to 
break all 
records for [sales of] high definition and flat screens, so it's important to 
have the 
local [channels] up and new receivers up and in the major markets prior to the 
holiday 
season-which we will do," said Bob Marsocci, VP of communications for DirecTV.

Trouble is, cable operators in most markets currently offer less expensive HD 
packages 
with more channels than DirecTV, which charges customers hundreds for an HD 
receiver-a 
competitiveness gap DirecTV CEO Chase Carey acknowledged during a recent 
second-quarter 
earnings conference call. Then there's satellite competitor EchoStar, which 
this summer 
gobbled up the HD Voom channels from Cablevision and cut its HD package prices.

"If you look at the comparative offerings today, cable has the better offering, 
plain and 
simple, and that's a dangerous place to be," said Bruce Leichtman, president of 
Leichtman 
Research Group. "DBS has been so successful getting the high-end subscriber, if 
they don't 
act quickly, they can lose them. What's working in DirecTV's favor is the cable 
operators 
have not been as aggressive at exploiting their advantages as they should be."

With subscriber growth slowing during the last quarter, DirecTV has recently 
dropped the 
price of its premium HD DVR receiver from $999 to $699 and then to $499. When 
its 
as-yet-unnamed MPEG-4 receiver debuts, DirecTV will lose a longstanding 
requirement that 
customers must own their equipment and offer a monthly rental option-just like 
cable 
operators, executives said.

DirecTV also plans to offer HD versions of local broadcast stations, a key 
programming 
service for attracting HD customers, available by the end of the year in its 12 
top U.S. 
markets-New York, Los Angeles, Chicago, Philadelphia, Boston, San Francisco, 
Dallas, 
Washington, Atlanta, Detroit, Houston and Tampa, Fla.

But implementation of the new services is coming down to the wire.

The MPEG-4 receivers were supposed to be released this fall, but were pushed 
back. The 
receivers will hit the first test market in October and the first 12 markets 
"by end of 
the year," said Eric Shanks, DirecTV's senior VP of advanced services and 
content.

ESPN2, a long-sought channel among DirecTV's core sports-fan contingent, is 
finally coming 
online Sept. 9. Another key channel, TNT HD, is still absent from the service.

The rollout also means converting about 500,000 existing HD subscribers to the 
new 
receivers, which are expected to cost subscribers between $250 and $275.

Mr. Shanks would not promise a free upgrade, but he said the transition would 
be "as 
painless as possible."

To support the addition of local HD signals and new receivers, DirecTV plans to 
launch 
marketing campaigns in key cities, though details are not yet available.

"The holidays are the busiest subscriber growth period in any given year, 
coupled with 
cable becoming more competitive," Mr. Marsocci said. "We're going to have pedal 
to the 
metal when it comes to marketing product and service."

Looking ahead, DirecTV plans to have 1,500 local HD channels and 150 national 
HD channels 
by 2007.





 
 
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