DirecTV Signs DreamWorks for HDTV

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DirecTV Inc. announced last week that it has signed a
second studio, DreamWorks SKG, to provide movies for its high-definition-television
pay-per-view lineup.

New Line Cinema had previously committed to the format.

DirecTV senior vice president of programming Stephanie
Campbell said the direct-broadcast satellite provider is talking with other Hollywood
studios, and it would like to forge HDTV arrangements with all of them.

The HDTV PPV channel is expected to launch in early
October, trailing DirecTV's introduction of Home Box Office's HDTV feed in August.
"We want to get our feet wet first and see how it works," Campbell said.

Initially, DirecTV's second HDTV channel won't be devoted
entirely to PPV movies. It may be filled in with programming from networks such as
Discovery Channel, BBC America and PBS, which have already produced HDTV programming.

DirecTV has not yet determined whether it would charge an
additional monthly fee for such a channel, nor whether HDTV PPV movies will cost more than
its current PPV offerings.

DreamWorks will not require DirecTV to price its HDTV
movies higher than its standard-definition movies.

"The economics are driven by the buys,"
DreamWorks head of worldwide pay television Hal Richardson said. Because PPV is a
transactional business, he added, "anything you can do to make this more attractive
and make people want to watch us more often" helps the division's revenues.

Whether or not providing movies in HDTV will help to lift
DreamWorks' PPV revenue depends on how many people are able to receive the signals,
Richardson said.

He could not say which of DreamWorks' movies would
initially be shown in HDTV on DirecTV's PPV service.

The first DirecTV-compatible HDTV sets, from Thomson
Consumer Electronics and Hitachi Ltd., are expected to hit retail shelves late this
summer. Thomson also expects to ship its HDTV-compatible DirecTV set-top box shortly
thereafter.

The consumer-electronics industry has not yet finalized a
copy-protection standard, according to DirecTV director of HDTV programs Jim Williams.

Campbell admitted that some Hollywood studios have been
hesitant about signing HDTV deals until the copy-protection standards have been fully
implemented.

Using a medium-powered satellite at 95 degrees west
longitude, DirecTV currently transmits an HDTV retail feed to help its dealers demonstrate
the technology. With the launch of the consumer feed, the HDTV programming is expected to
move to a high-power satellite.

In addition to its core service at 101 degrees, DirecTV
recently gained access to satellite spectrum at 110 and 119 degrees west longitude.
Current DirecTV customers would need to swap their dishes for slightly larger ones to
access the HDTV programming unless it is delivered from a satellite at 101 degrees.

Most recent Hollywood movies are shot in HDTV-friendly
formats, but it costs more to produce an HDTV master for video transmission.

Many studios are working on HDTV masters for HBO's HDTV
service, which launched in March. But PPV windows open earlier than premium windows.

Richardson said he was surprised that more studios had not
yet signed HDTV deals with DirecTV.

HDTV programming is more expensive for both the studios and
for DirecTV, Campbell said, although she would not detail how the costs are divided.

She also declined to say whether DirecTV offers financial
incentives to studios for providing movies in HDTV, but she added, "We're happy to
talk to anybody about anything."

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