Carey on DirecTV's 'VOD Experience'

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Charlie Ergen drew the ire of cable operators earlier this year when the EchoStar Communications Corp. chief described his firm's ability to download programs to a digital video recorder as “video on demand.” Rival DirecTV Inc. appears on the brink of pursuing a similar strategy, with the rollout of its new DirecTV DVRs, which ship in October. National Editor Steve Donohue caught up with News Corp. director and DirecTV president and CEO Chase Carey last week in New York, to talk about the big picture. An edited transcript follows:

MCN: Is it fair to say that since News Corp. has an interest in DirecTV, that you would never sell 24 or top shows from FX to a cable operator to distribute on their VOD platforms, since it's something DirecTV could never do?

CC: I don't think you can say never, but obviously there are concerns about doing so, and there are concerns about the existing lines of business, so what does it do to that?

There's obviously a value opportunity on the flipside. I think we're just part of that mix. I don't think the Fox-DirecTV relationship gives it any different perspective than it does in terms of Fox dealing with Comcast [Corp.] or DirecTV dealing with NBC.

MCN: But obviously you wouldn't want to see Comcast or Time Warner Cable offer subscribers something DirecTV couldn't.

CC: I think we're actually quite comfortable. We're going to have a VOD experience. Again, it will be more DVR-based, and ultimately complemented with broadband connectivity. But I think it's going to be more attractive. It's going to give people what they want in a more reliable form, that's easier to use, easier to access. So I think we're very comfortable competing in the VOD experience with the cable customer.

MCN: In terms of the bundle of high-speed data, video and voice, are you looking at big picture options like say, adding wireless phone?

CC: I think you're always looking at the broader world. Today we address the bundle. We have a bundle essentially through relationships with the RBOCs [regional Bell operating companies], so you could buy [digital subscriber line service] and satellite bundled together. Certainly wireless I think for us is the heart of what we are. We're a wireless service.

I think mobility is going to continue to have greater and greater value and premium value, so I think there's unique attractiveness for us to be able to expand our role in terms of wireless.

Obviously in the video sense we're developing DirecTV for cars and other devices, and so there clearly is a fit with the wireless world for us that we'll continue to expand upon. But certainly we will look to be opportunistic about forming relationships.

MCN: Do you think Verizon Communications Inc. and SBC Communications Inc. pose more of a competitive threat to cable or satellite with their plans to deploy video services via fiber?

CC: I think there are a lot of uncertainties about what the RBOCs ultimately will do. They've described these plans. I think you've got to wait and see what really happens. And I think as they've defined it, in some ways they clearly are competing with cable. Ultimately, depending upon how far they go they're competing with us to a degree, but I think first and foremost you've really got to see what they really do.

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