DirecTV to Enter VOD … Twice

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New York -- DirecTV Inc. is preparing to launch two types of video-on-demand services: one that will be broadcast via satellite and one that will be delivered via high-speed-Internet connections.

The satellite service, available sometime "over the next few months,'' will deliver a limited set of top movies to the hard drives of DirecTV customers with digital-video recorders. Customers would pick a movie off the shelf, in effect, and pay for it at that time. The on-demand offering would also include TV shows from NBC Universal and FX, as well as other content providers.

In the fourth quarter, DirecTV -- which has more than 15 million subscribers all told -- also expects to allow customers to use a high-speed connection that they purchase from any source -- be it cable company, telephone company or other provider -- to download thousands of movies and other video programs, then watch them on their television sets.

This "broadband VOD" service will be made possible with the introduction of HD versions of DirecTV set-top boxes with DVRs, officials said at the direct-broadcast satellite provider's investor meeting here.

The newer boxes, available later this year, tie together TV sets and high-speed-Internet connections, according to Eric Shanks, DirecTV's executive vice president of entertainment.

"This will enable the viewer to download titles through their broadband connection right to their play list," he said. "So with only a single headend for us to manage, unlike cable, we will have the technical capability to deliver the same volume -- tens of thousands of titles, if they want them."

DirecTV broadband video will launch with 2,000 titles, which will include cable-TV shows, movies, premium service and non-linear-channel content.

DirecTV expects that it will have 300,000 boxes that can support this service deployed by the end of the year, Shanks said.

"We will include rich graphics promoting the broadband content inside of our existing [electronic program guide] to give viewers easy access to find the titles," he added. "Plus customers will be able to use Directv.com [www.directv.com], or even their mobile phone, to select titles and have them downloaded to their DVR at home. So broadband VOD is the obvious starting point for us, but once the set-tops hook up to the home network, the possibilities will be virtually endless."

DirecTV's satellite-delivered VOD service, which will be deployed first, will include programming from the major networks such as those owned by NBC U, premium-network content, airings of some FX shows 48 hours before they run on the cable network, movies and customer-care information.

"So in essence, what we're doing is providing a top tier of television and movies right at the customer’s fingertips, which is a little different from what research shows as cable's VOD, which is usually the destination of last resort," Shanks said.

DirecTV will be able to store 60 hours of VOD content in its new DVR set-tops now, leaving subscribers another 100 hours for their own recording of shows.

"In 2007, we are roughly going to double the size of the drive, which will give us even more capacity for the viewers' home," Shanks said.

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