DirecTv Sets New Plan for MDU Business

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Direct-broadcast satellite provider DirecTv Inc. hascreated a Master System Operator (MSO) program to aid its growing network ofmultiple-family dwelling unit (MDU) system operators.

Kansas City, Mo.-based Golden Sky Systems Inc. was namedthe first MSO in the program earlier this month.

John McKee, vice president of special markets anddistribution for DirecTv, said the company plans to announce a second national operatorwithin the next few weeks. Ultimately, there will be four to six companies supportingDirecTv's more than 200 smaller MDU system operators across the country.

Each of the system operators has the option of choosing arelationship from among the MSOs or continuing to work directly with DirecTv, said McKee.The MSOs will not divide territories by geographic location.

The master operators will support the smaller MDU operatorswith help in technical design, marketing, access to working capital and right of entryinto properties. It will be up to the individual system operators and the master operatorsto determine how they will divide the revenues from MDU subscriptions, said McKee.

DirecTv system operators also market U.S. SatelliteBroadcasting's premium movie services to the MDU market.

'When we do MDU programs, USSB and DirecTv always workhand in hand,' said McKee.

Building the MDU market has been an expensive andtime-consuming process, said McKee. The company spent the past year creating a nationwidebase of commercial system operators, but expects it will take several years before it seesa return on investment for the MDU business.

'We recognized that there's a long time betweenthe time of the right-of-entry agreement and the time the architecture is done and thetime the first subscribers are signed up,' said McKee.
'It's a long and demanding process,' he added, 'but we think we canspeed it up with our program of MSOs.'

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