DirecTV Spends On Satellites; Boeing Deal Near $1B
8 Sep 2004 19:46 ET WSJ(9/9)
(From THE WALL STREET JOURNAL)
By Andy Pasztor
Satellite-broadcaster DirecTV Group Inc., stepping up its drive to enhance programming and outspend competitors, has committed as much as $1 billion during the next three years to buy and launch a trio of large, high-powered spacecraft to be built by Boeing Co.
The country's No. 1 direct-to-home TV provider, which is controlled by News Corp., also confirmed that it will use two previously ordered advanced satellites, already under construction by Boeing, to expand high-definition and local programming as soon as next summer.
Originally conceived as part of an ambitious project called Spaceway, those two unusually powerful, new-generation satellites were intended to set the standard for Internet-via-satellite projects. But amid doubts about Spaceway's business plan and projections of market demand, senior News Corp. executives have officially scrapped plans to use them to deliver Internet access for business and residential customers. In May, company officials denied such a step was imminent.
For Boeing's troubled satellite-making unit, the latest order provides not only a much-needed financial boost but a public vote of confidence in the company's flagship 702 satellite model. The model, which has been dogged by persistent technical problems and power malfunctions in orbit, hasn't snared a new customer in three years. Boeing said DirecTV also has an option to order a fourth 702 satellite, which borrows state-of-the-art technology Boeing is working on for military satellites.
The moves are the latest steps in DirecTV's aggressive growth strategy to earmark more than $2 billion in capital expenditures and increase subscribers through expensive new marketing and programming initiatives. The efforts are aimed at cable-television providers as well as rival EchoStar Communications Corp., the No. 2 U.S. satellite broadcaster.
Only the DirecTV service "will have the capability to bring hundreds of high-definition channels and other enhancements to consumers across the entire country," DirecTV President Chase Carey said in a statement. The additional broadcast capacity also is important to offer local television channels, interactive services and other programming enhancements to DirecTV subscribers.
While the moves are likely to win plaudits from federal regulators focused on expanding high-definition TV offerings, Spaceway's demise indicates the challenges facing satellite operators hoping to deliver Internet access across the U.S. Hughes Electronics Corp., DirecTV's predecessor, spent roughly $2 billion on the project, designed to provide high-speed and high-quality Internet connections able to compete with ground-based options from phone companies and cable providers.
8 Sep 2004 19:46 ET WSJ(9/9)
(From THE WALL STREET JOURNAL)
By Andy Pasztor
Satellite-broadcaster DirecTV Group Inc., stepping up its drive to enhance programming and outspend competitors, has committed as much as $1 billion during the next three years to buy and launch a trio of large, high-powered spacecraft to be built by Boeing Co.
The country's No. 1 direct-to-home TV provider, which is controlled by News Corp., also confirmed that it will use two previously ordered advanced satellites, already under construction by Boeing, to expand high-definition and local programming as soon as next summer.
Originally conceived as part of an ambitious project called Spaceway, those two unusually powerful, new-generation satellites were intended to set the standard for Internet-via-satellite projects. But amid doubts about Spaceway's business plan and projections of market demand, senior News Corp. executives have officially scrapped plans to use them to deliver Internet access for business and residential customers. In May, company officials denied such a step was imminent.
For Boeing's troubled satellite-making unit, the latest order provides not only a much-needed financial boost but a public vote of confidence in the company's flagship 702 satellite model. The model, which has been dogged by persistent technical problems and power malfunctions in orbit, hasn't snared a new customer in three years. Boeing said DirecTV also has an option to order a fourth 702 satellite, which borrows state-of-the-art technology Boeing is working on for military satellites.
The moves are the latest steps in DirecTV's aggressive growth strategy to earmark more than $2 billion in capital expenditures and increase subscribers through expensive new marketing and programming initiatives. The efforts are aimed at cable-television providers as well as rival EchoStar Communications Corp., the No. 2 U.S. satellite broadcaster.
Only the DirecTV service "will have the capability to bring hundreds of high-definition channels and other enhancements to consumers across the entire country," DirecTV President Chase Carey said in a statement. The additional broadcast capacity also is important to offer local television channels, interactive services and other programming enhancements to DirecTV subscribers.
While the moves are likely to win plaudits from federal regulators focused on expanding high-definition TV offerings, Spaceway's demise indicates the challenges facing satellite operators hoping to deliver Internet access across the U.S. Hughes Electronics Corp., DirecTV's predecessor, spent roughly $2 billion on the project, designed to provide high-speed and high-quality Internet connections able to compete with ground-based options from phone companies and cable providers.
