And picking up from the satellite internet access topic on the old thread:
Message 13787447
Cable World, May 1, 2000
By DEBBIE NARROD
As if local stations weren't enough, DirecTV and EchoStar are poised to launch interactive services later this year. Both companies plan to match cable, offering by offering.
"You can get anything you want, at Alice's Restaurant."
By the end of this year, DBS operators will be saying the same thing: Any broadband service a consumer will want will be on their platform.
DirecTV Inc. will launch separate set-top products developed with AOL Inc., TiVo Inc. and Wink Communications Inc. EchoStar Communications Corp. will launch services provided by Open TV Inc., Gilat Satellite Networks Ltd. and iSky Inc.
That's on top of EchoStar's relationship with Microsoft for Web TV. EchoStar's DishPlayer now includes a satellite TV receiver, digital video recorder, game player and Internet browser -- using the subscriber's phone line, Web TV and personal TV services including instant news and weather.
These moves could spell trouble for cable operators. DBS companies already offer beyond 150 channels of programming, and cable can do that only by conversion to digital. DBS, which is digital by definition, counts more than 11 million subscribers. Cable has about 4 million digital subscribers.
Even more troublesome for cable is DBS's newfound ability to offer local TV signals.
Robert Kaimowitz, managing director at investment firm ING Barings Inc., said in a March report that DBS continues to draw digitally-deprived cable customers. He projects that some 23 million cable subscribers still won't have access to digital services, even in 2009.
"In analog market segments," said the ING Barings report, "we expect DBS will capture approximately 47.2% or 20.6 million homes by 2009."
The report also predicts an 11% DBS penetration rate in digital cable areas by 2009.
The DBS companies are working to have every battle zone covered, offering programming packages ranging from a few dozen to more than 150 channels and planning interactive and Internet access services.
"EchoStar has the current edge on the broadband side. It has more than 100,000 DishPlayer 500s, complete with Internet browser capability, in the field. Kaimowitz estimated EchoStar is probably six months ahead of DirecTV technologically, although DirecTV has more than twice the subscribers -- 8 million to 3.4 million at the end of 1999. DirecTV parent "Hughes is doing it on its own, with assets within its umbrella," Kaimowitz said, while EchoStar is using "partners who can get there faster, using chips on all the horses."
EchoStar
Since Jan. 1, EchoStar announced ventures with Open TV, Gilat and iSky.
OpenTV, a worldwide supplier of software for digital interactive television, is working with EchoStar to create a low-cost, interactive digital receiver with a built-in hard drive, permitting viewers to pause and record live programs without the use of videotape. The box also will offer an electronic program guide, weather reports and other interactive capabilities, which include advertising, entertainment services such as movie information and music news, and interactivity with recorded programs.
The companies said the Open TV services that don't require the hard drive could be available to certain EchoStar subscribers this spring. The hard-drive box is expected to be available in the fourth quarter.
In its deal with Gilat, EchoStar plans to offer one-dish satellite programming and Internet access in limited areas by year's-end. The venture builds on an earlier agreement between Gilat and Microsoft Corp. to create Gilat-to-Home Inc. It will give EchoStar subscribers "always on," high-speed, two-way access to the Internet via the co-branded MSN-Gilat-to-Home portal. An EchoStar spokesperson said the service, using Ku-band satellites, would likely be aimed primarily at rural areas and small businesses where high-speed DSL service is not available. Subscribers would use their own PCs to access the Internet.
In March, EchoStar invested $50 million in iSky Inc., a deal aimed at offering both TV services and high-speed Internet services by satellite via iSky's Ka-band satellite transmission. iSky uses higher frequencies -- 20-30 Ghz, rather than 11-13 GHz for Ku -- and a smaller terminal. EchoStar spokesperson Marc Lumpkin said, "It's too soon to tell what we will be doing" specifically with iSky."
DishLink, a system for delivering broadband content and video channels to office desktops, debuted in April.
The intranet system connects a customer's local area network to the Dish Network, enabling distribution of large data files and streaming video via EchoStar's satellites to PCs in remote U.S. locations. Cost starts at $1,000 per unit, with monthly fees starting at $30.
DirecTV
DirecTV is debuting new products as well. A satellite receiver to deliver Direct's TV programming and TiVo is Personal TV[TM] service is expected in July. The hard-drive-equipped digital box will allow subscribers to record, pause, rewind, replay and replay in slow motion from live TV, as well as program the unit for preferred viewing choices.
Also coming midyear will be a Direct-specific set-top box from Thomson/RCA that will download software from Wink, offering subscribers TV enhancements, including weather services, channel guides and advertising tie-ins, such as coupons. "This baseline enhancement is enough for some people," observed DirecTV spokesperson Gina Magee.
The most ambitious product is expected to be available by third or fourth quarter: a multimedia AOL TV-DirecTV box, the result of AOL's $1.5 billion investment in DirecTV parent Hughes, which in turn put $900,000 toward developing the joint product.
The unit will combine DirecTV's digital TV platform with AOL's enhanced interactive TV service, AOL TV, and its AOL Anywhere service. Equipped with the necessary hard drive, the box will cache some information and offer data enhancement. In the initial phase of the box, a phone modem will be used to surf the Net or chat. Eventually, according to Magee, two-way Internet service will be provided via DirecTV parent Hughes' Spaceway Ka-band satellite system.
DirecPC, a sister company to DirecTV, already offers satellite-delivered Internet -- but not TV video -- services to business customers, providing one-way high-speed access on the downlink and standard analog modem speeds on the uplink.
Marketing
How are the DBS firms going to position these new products? DirecTV uses regional telephone companies, such as Bell Atlantic and SBC Communications, to sell DirecTV services in their telco market areas. Customers who purchase DirecTV along with DSL services from the telcos get one monthly bill for both services. EchoStar's retailers include not only independent distributors but also thousands of Sears and Target outlets.
"The big push this year," DirecTV's Magee said, "is to launch these three products. The consumer will have to be a little smarter. We'll have to put a lot of muscle behind educating."
The eventual goal, she pointed out, is to have one "super box," containing all the options available with the consumer able to pick desired programs, as customers often do now when buying a PC.
An EchoStar spokeperson said the first customers targeted for the new services would be new subscribers, with a push made to upgrade previous customers later.
Financial analyst Ty Carmichael with Credit Suisse First Boston said he felt the marketing of all the new products was "not critical to (the DBS companies) in the near term." He cited the companies' national footprint, their potential broadband pipeline into every home and the plethora of programming available. "Their value from my perspective is just emerging."
Kaimowitz of ING Barings concurred. "The DBS operators in the U.S. are poised to break all records this year," he said in his report, because of the addition of local signals. |
