DirecTV’s Motown Bound With MPEG-4

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Several weeks ago, DirecTV Inc. quietly launched high-definition MPEG-4 (Moving Pictures Expert Group) signals in its first market, Detroit, ushering in a new era in transmission for the leading direct-broadcast satellite provider.

The move to MPEG-4 makes no qualitative difference to consumers — subscribers can receive the same four Detroit TV stations in HD with current MPEG-2 set-tops. But while a single MPEG-2 HD stream takes up the space of six standard-definition TV channels, MPEG-4 is at least twice as efficient, taking up the equivalent of three channels or less, according to DirecTV chief technology officer Romulo Pontual.

Next year, the company plans to launch more MPEG-4 HDTV signals in more markets, culminating in 2007, when it plans to offer 1,500 local and 150 national channels in the format on four new satellites.

The technology levels the playing field for DirecTV with cable operators and telephone companies, in that it can also now deploy high-definition on a market-by-market basis.

In the past, DBS’s main constraint was not in adding national services like ESPN HD or TNT HD, but in its ability to offer local broadcast stations’ high-definition feeds. The 1,500 channels DirecTV will add will cover local TV stations in the top 150 markets.

CHIP-SET EDGE

As the DBS giant gets the jump on MPEG-4, many telephone companies are likely sitting on the sidelines with more than a tinge of envy. Because of the telephone industry’s copper plant — where transmission paths top out at 20 to 25 Megabits per second — MPEG-4 has been an alluring technology.

The MPEG-4 codec allows telcos to offer more channels than they could offer using MPEG-2 encoding. But telco set-top vendors haven’t been able to secure chip sets fast enough.

With silicon from Broadcom Corp., the satellite operator seems to have solved that problem.

“For DirecTV, it’s a big engineering effort,” said Pontual. “We produced a complex test stream. We hired several labs. It allowed us to validate the software and the drivers. We had a multitude of people working on this.”

The difference between telco and DTV efforts, he said, is experience.

“They have no experience,” he said. “We have a team of engineers that design the boxes. They don’t have the software to make the chip.”

DirecTV is combining MPEG-4 encoding with DVB-S2 technology, which uses 8PSK (phase shift keying) modulation, a higher order of modulation than the current 4PSK standard, Pontual said. DVB-S2 also uses a more efficient error-correcting code.

In Detroit, DirecTV is taking the MPEG-2 HD feeds of the ABC, CBS, NBC and Fox affiliates, digitizing and encrypting their signals, then transporting them via its national fiber backbone (it has a deal with Level 3 Communications, among others), to its uplink facility in California.

Using encoders from Tandberg Television, the signals are converted to MPEG-4, then sent out via one of DirecTV’s Ka-band satellites.

The company is now marketing an MPEG-4-capable receiver manufactured by LG Electronics in the Detroit area. The receiver contains the key MPEG-4 chip set necessary to receive and display the HD signals. It also has tuners for standard-definition channels, as well as the 18 MPEG-2 HD signals DirecTV offers.

Consumers can buy the receiver for $199, but with a marketing rebate of $200, their effective purchase cost is zero.

Detroit is just stage one for DirecTV. The company plans to open local encoding facilities in each of the 150 markets where it will introduce MPEG-4 technology over the next few years.

“We will start remotely encoding,” Pontual said.

For the national cable networks, DirecTV will handle upconverting the MPEG-2 signals to MPEG-4 in-house, the company said.

The MPEG-4 boxes don’t come cheap, but Pontual said costs are manageable.

“Next year we will have a significant price reduction,” he said, and in the long run, DirecTV believes the MPEG-4 boxes won’t cost any more than current MPEG-2 boxes.

DirecTV launched its second MPEG-4 dedicated satellite on Nov. 12, and two more are slated for launch in 2007, capable of handling the 1,500 local and 150 national HD channels in MPEG-4.

A 'PRUDENT’ DISH

While DirecTV plows ahead with MPEG-4, Dish Network parent EchoStar Communications Corp. has taken a more cautious approach.

In the company’s third-quarter earnings call with analysts, EchoStar chairman Charlie Ergen emphasized the link between MPEG-4’s extra costs and revenue to cover the expense.

“If we do move subscribers to MPEG-4, we expect to get income,” he said. “We’ll be prudent and economical how we do it.”

Ergen said EchoStar can get 50% of any efficiency gain from MPEG-4 by using 8-PSK technology. Given that, he said, “we can go a little slower on MPEG-4 development.”

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