EchoStar Communications Corp. is set to hit play on digital video recorders this fall, staging a major marketing push for the first time as it starts charging customers for the service.
During EchoStar's second-quarter conference call in August, CEO Charlie Ergen left little doubt that the DBS provider is high on the DVR concept.
"We told you long ago we think DVRs are the way people will go, not the big file servers and cable headends, and even the cable industry will have to go to DVRs," Ergen said. "I think you will see that borne out in the years to come. People want control of the television."
EchoStar, which builds its own DVR boxes, is set to roll out three new models by year-end. The new 510 box will sport a hard drive that can record approximately 100 hours of content, along with an HD DVR model able to record programs in the format.
A third box, with features that have yet to be defined, is also in the works.
But economics are still a key driver, and to that end EchoStar decided in the second quarter to offset the cost of the DVR boxes by charging its Dish Network subscribers a monthly fee for the service.
Current customers still get the service free, but new basic subscribers will pay $9.99 per month. "America's Top 100" and "Top 150" customers will pay $4.98 monthly, while top-end "America's Everything Pak" subscribers will get the boxes for free.
EchoStar for the first time added DVR offerings to its marketing, launching a new campaign at the end of August offering new subscribers the Dish Player 510 DVR, satellite dish, remote control and installation for free — a $299 savings.
The going rate for DVRs makes the monthly fee a comparative bargain, Ergen noted, even as it lowers the up-front costs of expanding DVR service. It also gives customers an incentive to trade up to the higher tiers to lower the monthly cost.
"So it makes good economic sense for us. It's the ability to get the DVR in front of more people," he said. "The $5-a-month fee is a more than fair price for the product, and the increased storage space that we have now."
EchoStar also is looking to upgrade its Dish Home promotion, offering customers the ability to link multiple TVs to their satellite feed. Those plans have been delayed, because product elements are not yet available.
"We had anticipated starting around the first of August, but we don't think we will be ready until mid-October now with that, and so that will be delayed," Ergen said.