DirecTV's Chang Dishes Out the High-Def
Q&A With DirecTV EVP, Content Strategy Derek Chang
By Multi Channel News Staff -- Multichannel News, 10/1/2008 6:23:00 AM
Satellite-TV provider DirecTV roiled the high-definition market in early 2007 when it disclosed plans to offer over 100 HDTV channels, touching off an arms race to add new content. More recently, it has continued to raise the competitive bar by launching a VOD service with HD content and setting plans to offer Blu-ray quality 1080p movies. DirecTV executive vice president of content strategy Derek Chang recently talked with HD Update’s George Winslow about the operator’s plans for HD and the role it plays in the competition between satellite, cable and the telcos for new subscribers. An edited excerpt follows.
Q: Give our readers a little bit of an overview your strategies for expanding your HD programming.
A: We came out of the box very aggressively at the start of 2007 with a promise that we would have 100 HD channels and since then we’ve really been delivering on that promise. We have put another satellite into service in August. We are up to 130 HD channels at this point, and we continue to have a pretty aggressive expansion on the VOD front, with HD content there as well.
Q: How many satellites have you put up as part of effort?
A: We’ve put up two satellites and we’ve announced one coming.
Q: What are your plans for expanding the HD content on you VOD platform?
A: When we launched in June we had a fairly robust offering. The biggest holdback or challenge we’ve had is the programmers not providing us the programming in MPEG-4. From a technology standpoint, we have pretty much leapfrogged everyone but the programmers, unfortunately, are somewhat beholden to the cable industry and their legacy technology.
But I think a lot of the programmers understand that this is where everything is going. They are all quickly getting up to speed and they are realizing that MPEG-4 is a much better format and that ultimately, everyone will be using it. Just like we pushed everyone forward on HD, we are going to push them forward on MPEG-4.
Q: Are you pretty much an all-MPEG-4 shop at this point?
A: Pretty much.
Q: You have announced plans to offer Blu-ray quality product in 1080p. When will that happen and how important will that be competitively?
A: It will roll out gradually, starting later this year, and I would think we would have a pretty full complement of 1080p movies before long.
For us it is pretty simple. All of our equipment and infrastructure was already geared to do it. So it is just getting the content directly from the studios in 1080p and putting it up on the satellite.
From a competitive standpoint, it further solidifies and enhanced us as the leader in the HD space. We’ve been in front of everyone and we continue to be in front of everyone.
Q: Will that force cable and your competitors to begin offering the higher quality 1080p content?
A: Ultimately, I think, yeah. But I think it will be hard for them. As it relates to video, I think we’ve been on the forefront and all those other guys have had to scramble to catch up.
There is always that natural first reaction, which is that “we don’t really need that,” which is more a way of saying, “we can’t do that.” But then, over time, you will see them trying to deliver it.
Linear HD was a prefect example. When we came out in early 2007 saying we were going to have 100 HD channels a lot of people pooh poohed it. They said you don’t need that many HD channels and at any rate there aren’t that many available. Then a year later, everyone is saying “oh yeah, we’ve adding x number of HD channels.”
Given our size and scale, we can provide incentives and encourage programming partners to do frankly what is in their best interest.
Q: At a recent financial conference, Rupert Murdoch expressed some regrets about his decision to sell his stake in DirecTV to Liberty Media, saying it was doing better than he expected because of its HD offering. How important has HD been in your overall sub growth?
A: From a sub point of view, our performance has been consistently strong. I think HD is important in that but it is certainly not the only thing. Our mantra is to be the leader in content and entertainment. Our leadership in HD is part of that, as is our leadership in sports, service and technology. It is all part and parcel of delivering an experience to the customer that is second to none. That has played a huge part of our ability to grow as a company.
Q: When you look at competitive landscape, how do you rate the HD offerings of your satellite, cable and telco competitors?
A: Without getting into specifics, they are clearly behind us and they clearly continue to play catch-up. I think that there are two elements to that. One is marketing and the perception of our product, which we did very well upfront. Then we delivered on the promises we’ve made, which has forced others to try to deal with what we’ve done if they want to be competitive.
Q: Cable has tried to counter your lead in linear HD channels by emphasizing its HD VOD offerings and the notion that it can offer more HD programming choices at any given time. How effective has that strategy been?
A: For cable, VOD, be it standard def or high def, has been the one thing that they’ve continued to tout as an advantage. Clearly, some customers like VOD, but I don’t think it has been a huge source of revenue for them. And now we have VOD. So it has pretty much negated that particular message.
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Pretty weak interview. No challenge on the 130 HD claim, even though the most anyone has ever come up with is 127. And that includes more than 20 PPV and 30 RSN's. Nobody cares about PPV, which will disappear once VOD really gets going. Most RSN's are Fox, which show local pro teams blacked out beyond the local area, or the same college games on every channel. No questions on why they have concentrated on RSN's and local HD content at the expense of national channels ( Travel HD, 5 HBO HD's, AMC HD, WGN HD, etc.) I guess this is an industry public relations outlet rather than a site with journalistic aspirations.
Brian Flanagan - 10/4/2008 7:02:00 AM EDT -
I'm surprised no one asked him about DirecTV's announcement almost a year ago that a deal had been reached to provide PBS local stations in HD. Still no sign of it in the largest media market, New York, or anywhere else for that matter.
Steven Silber - 10/2/2008 12:17:00 PM EDT
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