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News & Commentary
DIRECTV: The HDTV 'Misleader'
Once again, the satcaster pushes back the launch of its new High-Definition DVR.
By Phillip Swann
Washington, D.C. (July 25, 2006) -- DIRECTV has once again delayed the launch of its new High-Definition TV DVR. But this time, a Wall Street analyst says it could force high-def owners to sign up for another service.
And that could hurt the satcaster's subscription growth and stock price.
"We're skeptical investors will continue to give DIRECTV a free pass," Sanford C. Bernstein analyst Craig Moffett said yesterday in a note to investors.
DIRECTV says the HD Digital Video Recorder now won't be available until the Fall.
The satcaster initially said the HD DVR would be available in the spring of this year. But it changed that to the summer; then the end of the summer; now it's the "Fall."
Moffett said HDTV owners may not be willing to wait for DIRECTV to release the high-def recorder -- and expand its HD lineup. DIRECTV now offers fewer than 10 national HDTV channels while rival EchoStar provides 29.
"Product shortages will only delay the inevitable, in our view," said Moffett, suggesting that DIRECTV may start losing subscribers to EchoStar and cable operators who now offer more high-def channels and services.
DIRECTV last year made headlines by announcing that it would launch four new satellites over two years that would enable it to provide 150 national HD channels -- and local HD channels in most markets -- by 2007. But thus far, DIRECTV's primary focus has been on adding the local high-def channels. The satcaster has added just two national HD channels in the last year -- ESPN 2 HD and TNT HD.
Swanni Sez:
Moffett is correct that DIRECTV's HDTV customers are getting impatient. Many cable operators now offer twice as many HD channels as DIRECTV -- and a high-def Digital Video Recorder. And EchoStar has approximately three times as many national HDTV channels, plus the HD recorder.
If DIRECTV doesn't expand its national HD lineup soon, it will lose current subs -- and it will lose future subs in the growing HDTV audience.
The HDTV delays are inexcusable and more evidence that DIRECTV's management does not truly appreciate the needs of the high-def audience. David Hill, DIRECTV's president of entertainment, once said that he didn't understand why everyone is excited about HDTV. It appears that Mr. Hill's sentiments are shared by some of his colleagues.
While DIRECTV is investing heavily in new satellites for the future, there's no sense of urgency in providing its current HDTV customers with better service.
(I will give DIRECTV credit for rolling out local HD channels in dozens of markets this year, but cable TV operators have offered local HD for a few years now. You expect DIRECTV to offer something better than cable.)
Several years ago, when U.S. stores first began selling high-def sets, DIRECTV was quick to add a few HD channels so early adopters would have something to watch.
Consequently, at the time, DIRECTV was considered the "HDTV Leader."
But now, DIRECTV has become the "HDTV Misleader."
It's time for DIRECTV to stop making promises and start delivering new services.
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