DirecTV already has seen better than expected take-up of its video-on-demand (VOD) services launched in spring 2008, DirecTV CTO Rômulo Pontual told Via Satellite. 
    The U.S. satellite pay-TV operator, which has about 18 million subscribers, has made efforts to implement MPEG-4 and resolve issues inherent in new broadcasting technology. As satellite providers in the VOD market are providing formidable challenges to the previously dominant cable players of the sector, competition in the market is heating up. Even telecoms are now placing a great emphasis on VOD services as the small, but growing IPTV VOD market develops out of its infancy. 
    Pontual described how DirecTV is trying to stay a step ahead of its competitors with technology.

Via Satellite: Has DirecTV’s VOD service grown since it was launched?

Pontual: The growth in on-demand is greater than expected and we are seeing high levels of consumer satisfaction. We also have a number of improvements coming. We believe we have the most advanced on-demand service in the world. We have been the leader in implementing MPEG4, as well as resolving issues inherent in the new technology. We are now pushing the envelope in terms of disk storage.

Via Satellite: Is the new service helping DirecTV maintain its customers?

Pontual: DirecTV on Demand is complementary and customers have access to most of the titles free of charge. Participating content producers may have linear channels, as well as access to on-demand. The customers who take on-demand services are satisfied. This is clearly indicated by lower churn when compared to customers who don’t have it. We are pleased with the service and the underlying technology.

Via Satellite: Does a free service like DirecTV on-demand lead to generating revenues?

Pontual: The buy rate of cinema titles on the a la carte menu for our on-demand customers is higher than the buy rate of customers that consume these titles from linear channels. This increase to buy rates was anticipated, because the user has more opportunities to purchase the title and have better navigation experience.

Via Satellie: How is DirecTV’s on-demand technology different, if at all, from the other providers?

Pontual: Everyone one of our customers who has an HD PVR is able to access these services. When compared to cable providers, the major difference is that DirecTV has large storage in the homes and a large broadcast pipe that reaches all 50 states. Broadcast is the most efficient way to deliver content to multiple consumers. A smart product that can benefit from the broadcast pipe and local storage creates significant value. DirecTV’s Video On Demand is a hybrid system that benefits from broadcast and Internet delivery. The push system is like a predictor of what the customer will want to watch, you may call it a network cache. The two-way broadband connectivity serves the niche requests. Our solution may have the same name as a cable solution, but relies on very different technology strategy.
    DirecTV has vast expertise in compression technologies, as well as in using MPEG4. The video quality we are offering is outstanding, and this is achieved with commercially viable bit rates. Some of the cable/IPTV boxes have no local storage. So, the video quality is subjected to instantaneous impairments that our system can normally overcome. For example, boxes without local storage are directly impacted by short term network congestions, the only alternative is interrupt viewing or for the provider to switch to lower video quality.

Via Satellie: What future technology developments will build off of your on-demand products?

Pontual: We are developing new hardware technology to assist our installers. Video-on-Demand is ready, we are now putting in place other technology pieces to make the experience even better. Our goal is to make it simple for them to offer a professional and reliable installation in a cost effective manner. That will combine with the introduction of multi room DVRs. When we launched DirecTV on Demand last Spring, we noticed that the customer is able to connect the product and most do it by themselves, though some request special service.

Via Satellie: Will your on-demand service be offered to your Latin American customers?

Pontual: We are successfully leveraging synergies with DirecTV Latin America. We have a roadmap that matches their needs. We launched HD in all countries except Brazil and Mexico and we will soon launch in those countries – Brazil first, followed by Mexico. The same feature rich offering will be made available to Latin America customers. The U.S. always leads, but with all the technology R & D, we have done, we can successfully redeploy the new DVR for Latin America, both in Spanish and Portuguese.