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Q&A: George Gonzalez

The following is an interview with XStreamHD CEO George Gonzalez at the company’s headquaters early this month:

TWICE:What’s the latest on your plans for launch?
Gonzalez: We are currently going through UL and FCC (part 15B) testing
… Our manufacturer, Jabil, is ramping up production in parallel with our
testing right now. Our initial order was for over 10,000 units on our HD media
server, HD media receiver and PRO media receiver.
We want to set an extremely high bar. Nobody has anything close to what we
have. Everyone now is doing Internet-based systems, but no one stops to do the
simple math. You can’t deliver Bluray quality content over those pipelines at
Blu-ray bit rates, and when you get a lot of people logging on at once you get
bottlenecks that slow download times to a crawl.

Will you be working with any other hardware
companies to get your service out?

Gonzalez: Soon, we will be announcing a partnership with one of the top
video projector companies, who will be providing an XStreamHD system for free
to the consumers who buy their projectors. Instead of providing physical media,
they see XStreamHD as the tool that will really make their projectors shine.

TWICE:What are your retail distribution plans?
Gonzalez: Our initial distribution will be only through the Web site.
There will be no retail other than some CEDIA [custom installation] partners.
The majority of the subscribers will be direct to start. We are a small company
and we just can’t take on everything. Going out and getting retail partners and
then getting up to speed and educating is no insignifi cant task. We want our
equipment and technology to speak for itself. If someone sees it, they are
going to love it.

TWICE: How can you give consumers a demonstration of the service if
you are only selling direct to start?

Gonzalez: That’s why initial units will only go to A/V enthusiasts –
people who track and hear about trade information and read reviews. We are
selling convenience and quality people can’t get any where else.

TWICE: What does the footprint of your satellite
service encompass?

Gonzalez: Our satellite is positioned at 85 degrees West longitude with
full coverage of the continental U.S., most of Canada, most of the Caribbean
and Mexico. We had to give up Alaska and Hawaii in order to get a really high
look angle for the rest of the U.S. to get over tree lines. We are selling into
Bermuda and Canada through partners. We will soon be signing a capacity deal
with EchoStar, which owns the satellite we will lease.

TWICE: It’s been two years since you announced the plans. What sort
of skepticism has generated?

Gonzalez: We’ve gotten hammered on blogs by people saying, “Nothing can
do what they say they are going to deliver.” Second, they say question our
ability to launch a direct-to-home satellite business since no one else has done
one since DirecTV and Dish, and the third is, “Are studios really going to
permit them to do this?” You will see the studio releases this month – at least
two of our studios. We’ll try to push for the others. The satellite capacity
questions will be answered shortly when announce our capacity deal with
EchoStar, and as our ability to deliver what we say we can, the early adopters
who will get these in their homes will be able to testify that, “yes, it
actually does work” and will be able to show it their friends and neighbors.

TWICE: And the home distribution rights to these movies are not
locked up?

Gonzalez: You will see that the No. 1 studio and No. 3 and No. 4 will
all be our partners and distribute not only their new releases but their
catalog libraries. In fact, one of the challenges we are having at this stage
is making all the proper arrangements to have so many titles delivered to us.
We had to go and get an encoding partner house. We went to the top two guys,
who have the vaults that protect the studio’s content, because the studios’
deals don’t just give us the master copy, and then that gets encoded. So we
picked a partner that can do that process and give us back the encoded files.