DIRECTV, TIVO NEAR AGREEMENT ON SATELLITE-BASED VIDEO-ON-DEMAND
DirecTV and TiVo will formalize agreement for video-on-demand (VoD) within 60 days that will use portion of hard drive in current combination receiver, DirecTV Global Digital Media Pres. Lawrence Chapman said. Meanwhile, DirecTV/AOLTV product has been postponed until later this year, marking 2nd time service debut was delayed.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Many details of proposed VoD service, including name and pricing, haven’t been finalized, but it’s likely to rely more on niche and specialized programing at start rather than movies, Chapman said. Only one major film studio -- MGM -- is participating in DSL-based VoD test being conducted by Blockbuster and partner Enron. DirecTV has said it might rely on premium programmers such as HBO and Showtime as well as original content.
Chapman declined comment on whether Blockbuster would have role in service, but said companies would discuss it. Blockbuster announced VoD agreement with TiVo early last year and sells DirecTV service. It also is expected to take over DirecTV’s 55- channel pay-per-view (PPV) service in first half once it hits sales milestone, source close to company said. PPV service will carry Blockbuster name, dropping DirecTV’s DirecTicket banner, source said. Blockbuster spokesman didn’t comment. Among other possible programming partners is Starz Encore, which has separate agreements with TiVo and DirecTV. Starz Encore has long been proponent of VoD and last year unveiled plans for VoD and subscription VoD (SVoD) services. Starz Encore officials didn’t comment.
VoD will use “idle capacity” on DirecTV’s satellite fleet to “feed the hard drive” of combination product, Chapman said. Philips-branded DirecTV/TiVo receiver has 40 GB and 15 GB hard drives and 2 tuners, only one of which has been activated. TiVo CEO Michael Ramsey declined comment on possible service, but said company’s DirecTV agreement allows for allocation of bandwidth “so we could use it for that kind of thing.”
EchoStar is expected to remain out of VoD fray for now. While it’s investor in ReplayTV, which also has partnership with Starz Encore, no service is imminent, Satellite Services Vp Mark Jackson said. EchoStar CEO Charles Ergen said company was “taking a look at” ReplayTV’s new business model that focuses more on services and licensing and less on selling hardware.
Chapman declined comment on when AOLTV service would be available, but said delay was tied to “combination of software issues and consumer strategy.” AOLTV shipped Plus one-way service last fall, but experienced slow sales that sources attributed to Internet company’s focusing more on rolling out 6.0 version of its software.
EchoStar and DirecTV again locked horns when latter’s affiliated company, Hughes Network Systems (HNS), started DirecPC’s 2-way satellite-based Internet access service at CES. Pricing for DirecPC won’t be finalized until March, but hardware probably will be more expensive than $149 receiver used in current one-way DirecPC service, said Paul Gaske, exec. vp-gen. mgr. of HNS’s Consumer Div. EchoStar, which had focused on partnership with DSL provider, will shift strategy now toward seeking agreement with RBOC, Jackson said. Many DSL providers, including Covad and Northpoint Communications, have run into financial problems in recent months. “If you look at how DSL works, you want to partner with an RBOC,” Jackson said. “The DSL providers are highly dependent on provisioning with the RBOCs, so at the end of the day the RBOCs control the market.”
Pegasus Communications, meanwhile, has started marketing 2- way DirecPC service and is requiring dealers to sign exclusive sales agreements. Pacts have come under fire from some dealers, who already are carrying Starband service. “We are in the marketplace early, have working technology and know it functions correctly,” Pegasus Product Development Vp Christopher Walczak said. At same time, Pegasus also will market DirecPC Express Classic one-way satellite service that will use phone line for return channel. Major improvements over former DirecPC service include established dealer network and national ISP agreement with Genuity, Pegasus CEO Marshall Pagon said.
BellSouth’s decision to abandon plans for regional satellite service could benefit EchoStar, observers said. Latter has agreed to make Digital Sky Highway (DISH) service available to BellSouth’s 120,000 former MMDS customers with RBOC responsible for making conversions, said Ergen, who declined to release details of agreement. Hardware will be switched free. BellSouth will maintain MMDS through transition to DISH in early 2002. BellSouth said decision to scrap plans was part of effort to focus on DSL business, which had 200,000 subscribers at year-end. BellSouth’s decision also signaled end of last remnants of Americast VoD system.