DirecTV Expands HD Battleground to VOD

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DirecTV has expanded the battle for the best HD packages between cable and satellite to the on-demand realm with the nationwide launch of a VOD platform that has over 4,000 titles, including about 150 in HD.

Until recently, cable, which has lagged behind satellite providers in linear high-definition channel counts, had been heavily promoting its VOD platform as way to differentiate its offering and provide consumers with a greater array of programming choices.

“With our launch of our on-demand service, not only is cable playing catch-up in the [linear channel] HD world, they don’t have the differentiator of on demand any more,” said Eric Shanks, executive vice president of DirecTV Entertainment. “I’m not quite sure where they will head” now with their marketing efforts.

The service, which began beta tests in October 2007, launched nationally in early July. It uses both digital video recorders and a broadband connection to deliver content on demand and is available at no extra charge to customers who have a DirecTV Plus(R) HD DVR or the R22 DVR receiver.

The most popular content is pushed to the set-top box while the other titles are streamed over the broadband connection and are available for viewing in less than 30 seconds.

While the service marks a potential sea change in the high-def competitive landscape, Shanks stressed that the VOD product is only one aspect of the satellite provider’s strategy using the Internet to deliver a host of new services.

“The key thing for us is that this is a piece of a much bigger pie, which is really embracing the Internet and getting a whole new core set of features out into the market, like the DVR scheduler, and some of the interactive stuff you’ll start to see us doing over the Internet connection,” later this year or early next year, he said. “This is really a fundamental building block and the opening up a whole new world of services.”

Shanks declined to provide download rates for the on-demand services, saying it was too early to provide numbers, but he pointed to the popularity of their DVR scheduler as an illustration of their value to DirecTV customers.

Since launch, the scheduler, which allows customers to schedule recordings on their DVR when they are away from home via the Internet or mobile phones, has been used to record programs over 1 million times, Shanks said.

Fully expanding those on demand and broadband services to most of DirecTV’s base could take some time.

The company isn’t releasing the number of homes who have the two set-top boxes that allow the VOD service to function or how many of those boxes are actually hooked up to the Internet.

Shanks would note only that the number of homes that can use the on-demand service “is significant” and that the numbers are “definitely big enough for us to want to build an on-demand business. We are betting on the future. With us or with cable, the majority are still standard-definition, non-DVR homes. But the number is growing and we’re better on the future.”

DirecTV is also planning to expand the amount of HD content available on demand. Most of the current HD on demand programming is movies, but Shanks noted that DirecTV also has some new NBC network series in high-def, as well as HD content from NBC’s on-demand Olympic coverage, and the Smithsonian channel.

“I think our focus right now is getting more movies,” he said, adding that they are also looking for more MPEG-4 content in high-def, which would save satellite capacity and allow them to store more content on the set-top box.

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