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SkyFILES: How Four Birds Change Competition

Started by Gregg Lengling, Friday Sep 10, 2004, 08:00:53 AM

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Gregg Lengling

by Michael Hopkins mhopkins@mediabiz.com

The first reaction in our office to the big DirecTV news Wednesday: "At least we now know with 100 percent certainty what they are going to do with those SpaceWay satellites."

Two days ago, DirecTV announced plans to use SpaceWay Ka-Band birds, and construct two other Ka-Band satellites, to support delivery of thousands of local HD channels.

The news wasn't a surprise (executives have talked about using SpaceWay to support high-def), but the announcement is significant. The move to launch SpaceWay satellites beginning next year (which will support delivery of up to 500 local HD channels) and construct and launch additional spacecraft in 2006 and 2007 (which could add another 1,000 local HD channels to the mix) represents a billion-dollar investment for the company, in our estimation, and dramatically changes the competitive landscape for pay-TV.

Cable has been rolling out local high-def in markets where it's available at a slow but steady pace. Satellite TV has said in the past that it doesn't currently have the capacity to offer lots of local channels in high-def. But as DirecTV Group CEO Chase Carey said Thursday at an investment conference, the technology is here to to deliver the HD goods to consumers via satellite.

For cable, DirecTV's HD moves will compel the carriage of more local high-def channels, especially before the new satellites are placed in orbit. And, as Carey pointed out during his fireside chat, cable companies will have to compete with a satellite TV provider with a national brand that can reach every household in the country. The DirecTV news also could put pressure on the cable business in Washington, D.C., where it has been fighting dual-carriage of broadcaster analog and digital signals as well as carriage of any broadcaster multicast carriage.

And then there's EchoStar and its DISH Network service, DirecTV's main competitor in the DBS business. No specific plans have been announced by EchoStar concerning more local HD (both DirecTV and DISH Network offer HD feeds from CBS covering certain local owned-and-operated stations). But don't expect the scrappy No. 2 satellite TV player to ignore the big move from DirecTV.

In addition to all that, the DirecTV news could send ripples across Capitol Hill, where lawmakers are considering the re-authorization of key satellite TV legislation.

Do you have a comment or letter for SkyFILES? Write the editors at: editor@skyreport.com. Please note, your comments may be used for our Web site.
Gregg R. Lengling, W9DHI
Living the life with a 65" Aquos
glengling at milwaukeehdtv dot org  {fart}