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DBS Providers Compete Despite Pending Merger

8/08/2002 12:21:00 PM Eastern

Las Vegas - Although the pending merger between DirecTV and EchoStar contributed to a scaled back 2002 Satellite Broadcasting & Communications Association (SBCA) convention, it was business as usual for the two direct broadcast satellite providers.

Each company continued to move forward as competitors, introducing a number of new direct broadcast satellite (DBS) receivers, including next-generation digital video recorders (DVRs), some of which ultimately may have to be replaced if the two separate providers select a single digital platform.

DirecTV used the show to unveil the first combination satellite receiver and TiVo DVR to emerge from a previously announced distribution and branding agreement between DirecTV and TiVo. However, it is possible the product may have to be replaced with a PVR based on a different digital platform in a merged EchoStar/DirecTV.

'We can't wait to run our business. We are moving forward on a lot of strategic initiatives,' stated Brad Beale, DirecTV advanced products and new media senior VP. 'It doesn't make sense for us to sit on our hands and wait for the [Department of Justice] to come down from the mountain and tell us what's going to happen.'

The product - which initially will be manufactured and distributed by DirecTV sister company Hughes Network Systems (HNS) - will be known as the DirecTV Digital Satellite Recorder with TiVo features. The TiVo name will be de-emphasized in the new product, and DirecTV will take control of many of the service's extra promotional features - including video on demand.

It includes dual tuners, and USB 2.0 port for future connectivity capability and a 40GB hard drive, capable of storing up to 35 hours of recordings at a time.

DirecTV announced it has changed the pricing model on the recorder. The new DVR will sell for $199, and the reduced monthly service fee for all DirecTV TiVo units (past and present) went from $12.95 to $4.99. The DVR fee will be waived for subscribers to the Total Choice Premier premium programming tier. DirecTV has also eliminated the $250 lifetime service fee option for all DirecTV/TiVo products.

The new recorder will have many of the capabilities of TiVo's current Series 2 stand-alone DVR, although the agreement between DirecTV and TiVo will allow DirecTV to offer some of its own DVR services while allowing it the right to refuse some TiVo-initiated services.

One of DirecTV's first special DVR services will be a trial subscription video-on-demand (SVOD) service arranged with premium programmer Starz Encore. The service will give users the option of programming the DirecTV DVR to automatically record up to five Starz movies - taken from the regular Starz channel lineup - per month. The feature will be offered at no extra charge to DirecTV DVR subscribers that take the Starz channel in their programming packages.

The recorder will be available from Hughes Network Systems in the fall, and 'we will move as many as HNS can build,' through the fourth quarter, Beale said. 'Once we get the product out there you will see [DirecTV] doing much more robust national promotions. I expect to see some limited marketing on the part of DirecTV, probably targeted with a retailer in certain markets in the fourth quarter, as we go to launch the thing.'

EchoStar also demonstrated an aggressive approach to marketing next-generation PVRs and other DISH network products.

The company gave a sneak preview of a number of DISH network receivers - including three new DVRs - slated for an early 2003 release. Most noteworthy was the DISH PVR921 HDTV-capable receiver/DVR, which will record both standard and high-definition programs on its massive 160GB hard drive. The unit will include both DVI-HDTV and IEEE-1394 digital interfaces, a USB port, interactive service capability and built-in ATSC tuning. Pricing was not determined.

EchoStar also showed a special satellite-only HDTV-capable IRD designed exclusively for new integrated digital television sets that do not include internal digital satellite reception. The low-cost HDTV set-top box will only include an IEEE-1394 with Digital Transmission Content Production (DTCP) interface for connection to sets from such manufacturers as Mitsubishi, Sony, Hitachi and RCA. It is slated for early 2003 release.

Another next-generation DISH DVR, the DISH PVR522 is a two-tuner model with an 80 GB hard drive and the ability to use the second tuner to relay programs to a television in a second room via an RG-6 coaxial cable connection. EchoStar will also offer next year a stand-alone IRD with dual-tuners and the same second television viewing option.

The third new PVR slate for 2003 was the DISH PVR 721, which will offer 90 hours of program storage capacity, Interactive functions, and USB port for connection to an optional Lexmark printer or CD-burner. The hard drive can be tapped to store digital photo and music files.

Thomson, which is usually a large presence at SBCA shows, had a relatively low profile sharing quarters with DSI distributing. Still the parent of the RCA brand unveiled a line of new standard DirecTV IRDs that are scheduled to ship late this year. The IRDs feature most of the advanced features from the current RCA DirecTV line, plus a unique compact wedge design style.

The RCA DRD435RH will be the new entry piece, featuring a three-day program guide. The DRD455RH adds an optical Dolby Digital output and a seven-day program guide, and the DRD485RH adds to that a coaxial Dolby Digital output and component video output. Prices will be announced later.

RCA also unveiled its second-generation HDTV set-top IRD, the DRC-200. The unit will receive all ATSC broadcast signals and DirecTV standard and high-definition programming. Pictures can be displayed in the following user-selectable DTV formats: 480i, 480p, 720p and 1080i. Outputs including DVI-HDTV, HD component video and RGB via a 15-pin D-sub connector, and optical Dolby Digital output. It will carry a $699 suggested retail price when it ships later this year.

Sony, which had a low-key presence in the O'Rourke Brothers Distributing booth, announced its new SAT-HD200 ATSC/DirecTV HDTV capable receiver. The unit will display the 480i, 480p, 720p and 1080i DTV formats, and will include both HD component video and DVI-HDTV interfaces. It will ship in September at a $900 suggested retail price.