Thursday, March 13, 2008

DirecTV to Start On-Demand

Talk about changing the media landscape, VOD was an important differentiator between cable and satellite. With this news, satellite services like Direct TV and Dish are working to close those differences. Still what keeps the two services separate are satellites inability to provide broadband service and its ability to provide phone. Direct also demonstrates the value of content by pushing their ability to provide more Hi Def linear channels than their competition.

Most interesting, what is required for a Direct customer to get VOD content is a broadband connection and per this report, half of all their customers also have a broadband connection. But from where? Are these customers also taking hi speed from the cable provider and perhaps basic service on one TV in the home as well. Could this mean that the cable operator has not truly lost this subscriber, they may have simply downgraded to fewer services.

Or are these connections with telcos like AT&T. As AT&T rolls out its own version of cable called U-verse to more and more homes, do they try to convert these subs away from Direct to AT&T? How do these two businesses remain friendly in communities where they also compete with one another.

Technology continues to make more and more things possible and I am sure the ideal situation for satellite is interactive communication, not the one-way transmission they currently use with a phone connection for the return. One day, that should be economically feasible. But perhaps the electrical outlet can provide another source to harness interactive possibilities. Competition is good for business and Direct TV continues to demonstrate that they know how to compete. Today broadband is the bandaid approach to VOD and interactivity, tomorrow, who knows.