DirecTV Targets HD; Dish Promotes DVRs

Las Vegas — The nation's two major satellite providers last week illustrated how they are pursuing two very different strategies with consumers, with DirecTV preparing to launch a high-definition service it said would have three times as many channels as any other and EchoStar Communications focusing on the rollout of digital video recorders.

At the 2007 International Consumer Electronics Show here last week, DirecTV boasted that it planned to launch 100 national HDTV channels this year.

President Chase Carey told a CES press conference that DirecTV was putting the final touches on a HDTV package that he claimed “can't be rivaled” by its competitors.

“There is probably nothing more important in the next year than the high-definition agenda we have,” said Carey, adding that DirecTV already had signed deals, or agreements in principle, with more than 70 major networks.

That list included networks such as CNN, Cartoon Network, TBS and USA Network, programmers that hadn't even unveiled their HDTV plans as of DirecTV's press conference last Monday.


The nation's biggest direct-broadcast satellite provider also touted its spring launch of a video-gaming league, Championship Gaming Series, and Sat-Go, a briefcase-sized portable receiver that allows consumers to take DirecTV with them and watch it wherever they are.

In contrast, at its CES press conference EchoStar pushed its “DishDVR Advantage” package. Customers can pay $49.99 a month for the “America's Top 200” combination of channels and a dual-tuner standard-definition receiver; or opt to get EchoStar's HD ViP622 DVR for free, take the DishDVR Advantage offer and pay an additional $20 a month for DishHD programming.

EchoStar also unveiled its own satellite on-the-go product, MobileDish, which allows customers to watch Dish Network in their vehicles, even while in motion.

The news from the CES satellite press conferences drew different reactions from the analysts who attended the gatherings.

“The big take-away seems to be that DirecTV is betting on HD, and EchoStar is betting on the DVR,” said Craig Moffett, of Sanford C. Bernstein & Co.

“Those two strategies could easily collide,” he said. “Dish is giving away HD DVRs for free, while DirecTV plans to charge $199 for a box that the customer will still have to lease when they get it home. On the other hand, DirecTV is launching 100 channels of national HD later this year, in a move that will definitively wrest the lead in HD channels from EchoStar.”

While Moffett said that both strategies have their merits, “they have one thing in common: They're both expensive.”

Another analyst who attended the CES satellite press conferences, Carmel Group chairman Jimmy Schaeffler, was bullish on EchoStar's DVR rollout and skeptical about DirecTV's HDTV and other plans.

“Charlie's focusing on DVR, DVR, DVR, which is a mass, mass-market product: Obviously, a very wise strategy,” said Schaeffler, who has been involved in legal matters for and against EchoStar in the past decade. “DirecTV, on the other hand, is focusing — in a way that I would call less wisely — on niche markets. They're focusing on Sat-Go and Championship Gaming, probably two great products in their own right, but not focused on the mass market. … To me, that's missing the mark.”

Carey said that DirecTV is launching two satellites by mid-year, DirecTV 10 and DirecTV 11, which will give it the ability to deliver more than 1,500 local HD and digital channels and 150 national HDTV channels.

But Schaeffler questioned whether DirecTV's HDTV drive, and its 100-channel package, will come off according to plan.

“The problem I have with the HD announcement right now is it's very dependent on a lot of things that are way out there, like launching a couple of satellites — which is a big deal — and getting the satellites completed, and testing the satellites, and going through all of the operations to get the technology working, and then going through the marketing,” Schaeffler said. “And to me, it's just too early to really call that a real product.”


At the “Pipelines Power Panel” at CES last Tuesday, Time Warner Cable president Glen Britt was bearish about the revenue opportunities that HDTV presents — despite his fellow panelist Carey's upbeat outlook on it.

“HD is terrific. It's really not a business, though,” Britt said. “Remember what we're doing here. We're undergoing a transition to a new standard. At some point, I assume, everything will be HD, and we'll all carry all the HD signals.”