Happy Birthday DirecTV!

[Gregg Lengling]

Ten years ago tomorrow, LeMoyne Martin stepped up to the counter at Cowboy Maloney's Electric City in Jackson, Miss., and bought an RCA Digital Satellite System (DSS). It was the climax of six months of pre-launch preparation and media grooming. That night, the launch team went back to the hotel and turned on the television to see the results of our public relations slam-dunk. We watched media history unfold in front of our eyes: A white Ford Bronco and about a million cop cars cruising up a Los Angeles freeway.

Despite coming second best in the publicity sweepstakes that day, it was the launch of DSS that had a truly lasting impact on the U.S. television industry. The original players are mostly gone or on the way out. DirecTV is now controlled by News Corp., the NRTC (who lit up LeMoyne Martin's DSS unit with DirecTV programming) is pulling back from direct involvement, and U.S. Satellite Broadcasting, the company I worked for at the time, was long ago rolled into DirecTV.

But the two individuals most responsible for launching DBS in the United States remain at the forefront of the digital television industry. Nipper and Chipper, RCA's canine icons, are still reassuring consumers that advanced television technology is as reliable and consumer-friendly as the family dog.

The digital technology they're promoting now spans a much wider array of products. Satellite systems, for both EchoStar and DirecTV, are no longer front and center. The range includes high definition television sets, DVD recorders, Internet appliances and even cable modems. Parent company Thomson is one of the world leaders in IP (Internet protocol) set-top boxes. Difficult as it may be to accept, Nipper and Chipper are working for the cable guys these days.

Then again, maybe not. IP set-top boxes are being introduced into the U.S.. multichannel marketplace by telephone companies and municipalities who, like DirecTV, EchoStar and VOOM, aim to compete head-to-head with the established cable companies. IP technology allows them to deliver an effectively unlimited number of traditional, linear HDTV networks like Showtime or HBO, plus it enables true random access, video-on-demand (VOD) services..

True VOD is being promoted as "satellite killer" technology. It's a debatable point, but the ability to download any video content at any time has the potential to create as much grief for the DBS business model as Napster and iTunes are causing for the music industry. And IP television providers' ability to deliver carrier-class telephone service and wicked fast Internet access on the same pipe is a formidable competitive advantage.

IP video still has growing pains, and won't be much more than a blip on market share radar screens for several years to come. Not forever, though. Even cable industry technical gurus agree that IP video delivery will be the end game solution in five or 10 years. I can guess what advice Nipper and Chipper would offer the DBS industry: Unless you're the lead dog, the view never changes.

Steve Blum is a consultant specializing in DBS business development, who loves dogs but has never quite gotten over being upstaged by O.J. Simpson.. He can be reached by email at SteveBlum@tellusventure.com, or via his company's Web site at http://www.tellusventure.com.