Should You Ride The HDTV Wave?

By | September 20, 2004 | Feature

By Paul Dykewicz

Those who like to wait until a trend is almost palpable before pursuing it for fear of acting prematurely should have seen plenty of indicators to know the time to catch the high-definition television (HDTV) wave is now.

Companies large and small are preparing for an HD future, and the momentum is building. Evidence during the past couple of weeks is overwhelming that serious money from marketplace leaders is pouring into the pursuit of HD opportunities. Consumers are bound to follow.

For those still in doubt, consider the order for three new HD-capable satellites that DirecTV, the El Segundo, Calif.-based U.S. satellite TV services provider, placed with Boeing Satellite Systems earlier this month. Add in DirecTV’s announcement last week that it is teaming with Samsung Electronics in a $15 million marketing campaign to spur HD equipment sales, and it is clear the largest satellite TV service in the United States is gung ho about the technology.

HDTV Expansion

With more local broadcasters nationwide rolling out HD-capable signals and with additional programming becoming available, consumers now have growing incentive to buy HD sets. Aside from the unequaled signal quality of HD, especially for sports and nature scenes, the price of HD sets is continuing to fall.

DirecTV is trying to make consumer purchases of HD sets even more enticing by working with Samsung to roll out a new HD television bundled equipment and programming package for DirecTV customers. One lure is to offer four free months of programming to those who sign up for “NFL Sunday Ticket” and for DirecTV HD programming packages.

In addition, new customers who purchase a Samsung HDTV monitor, priced as low as $999, would receive an instant rebate of $100 off any Samsung-DIRECTV HD receiver or the DirecTV HD DVR. The DirecTV programming offers and the Samsung HD equipment rebate would let new DirecTV customers save more than $500.

Current DirecTV customers would receive $100 off of a Samsung-DirecTV HD receiver, if they purchase any Samsung HDTV monitor costing more than $999 as well as six months of the DirecTV HD Package and three months of Showtime Unlimited, including Showtime HD.

DirecTV officials claim that they are making the “most aggressive” push by any company to date to spur HD’s rollout. Rainbow DBS could counter that it offers far more exclusive HD programming than DirecTV or any other provider but its Voom service still is in search of a customer base after rolling out commercial service earlier this year.

Voom currently offers a lineup of 30 HD channels, including a package of 21 commercial-free HD channels created by Rainbow Media Holdings LLC. Voom’s HD lineup also includes STARZ! HD, Encore HD, Showtime HD, Playboy Hot HD, ESPN HD, HBO HDTV and Cinemax HDTV.

In contrast, DirecTV is in catch-up mode, offering far fewer HD channels. However, DirecTV features the top-programming names with its offering of a national HD Package that includes ESPN HD, Discovery HD Theater, HDNet, HDNet Movies, Bravo HD+ and HD Special Event programming, for $10.99 per month. DirecTV also features HD Pay Per View programming, as well as HBO HDTV and Showtime’s SHO HD.

EchoStar Communications Corporation [DISH] has been comparatively quiet since its Jan. 8 announcement at the 2004 International Consumer Electronics Show in Las Vegas it would offer a 16:9 HD television monitor, a HD satellite TV receiver, a satellite dish, home delivery and standard professional installation for less than $1,000. The company’s modest number of HD channels includes ESPN HD, Discovery HD Theater, HDNet and HDNet Movies for $9.99 per month ($109.89 annually). Expect EchoStar to jump back into the HD free-for-all in a prominent way in the coming months. It is not EchoStar CEO and Chairman Charlie Ergen’s style to stay quiet for long.

New Entrants

Other companies teaming to dive into the HD marketplace include the troika GlobeCast, PanAmSat [SPOT] and Scientific Atlanta, which plans to offer a HDTV satellite distribution platform above North America on the Galaxy 13 spacecraft. PanAmSat’s Galaxy 13 supports the Globecast HD platform, which would manage end-to-end HDTV transmissions and connect customers from its digital media teleport in Los Angeles by using Scientific-Atlanta’s PowerVu HD encoding and digital content distribution system. The three-way initiative is aimed at helping cable TV operators deliver more HD sports and entertainment programming.

Surf’s up.

Paul Dykewicz is senior editor and senior analyst of Satellite News. He can be reached at 301/354-1769 or by e-mail at pdykewicz@accessintel.com.

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