DirecTV to Ship Five-Tuner HD/DVR, Honing Its Focus on Streamed Content

DirecTV will ship a five-tuner HD/DVR receiver in 2011 capable of streaming three 1080p video feeds as it expands the base of home networking and Internet-connected devices, Chief Technology Officer Romulo Pontual told us Thursday at the company’s analysts meeting in New York.

The HD30 will feature at least 1 terabyte of storage and a “significant increase” in DRAM memory beyond the 512 MB found in the HD24 that it replaces, Pontual said. The price hasn’t been set. The device will feature a Broadcom processor and probably will support the RVU Alliance platform, a protocol being developed by DirecTV and others that’s designed to allow CE devices to share content within a home, he said. The RVU technology is designed to pass video from a cable operator through a residential gateway or media server to a CE product.

The new HD/DVR receiver will arrive as DirecTV readies for mid-2011 a new HD user interface to be delivered in 1080p, a major step up from the current 720x480 version. It also will add better search and recommendation features, using data supplied by Tribune Media Services, and provide access to the new DirecTV Cinema video-on-demand that features more than 4,000 movies and 2,000 TV shows. DirecTV Cinema will deliver all movies in 1080p and feature a series of subsections including those dedicated to movie classics, holiday films and 3D fare. Some films will be available the day of DVD release or even before it, under a new program. New titles are priced at $5.99, while “classics” are $3.99. “That’s going to lead to higher movie consumption and more premium content being available,” Chief Marketing Officer Paul Guyardo said.

DirecTV will bolster its 3D offerings this month with six films, including Paramount’s The Last Airbender and Disney’s A Christmas Carol. All will be priced around $7, said Derek Chang, executive vice president of content strategy and development. Another six -- including DreamWorks’ Shrek Forever After and Sony’s Desperate Measures -- will debut on DirecTV in January, he said. DirecTV launched n3D, pay-per-view 3D, and ESPN 3D this year, but the technology has fallen short of prelaunch hype, Pontual said. He declined to disclose how many DirecTV subscribers have a 3D TV. The 3D movies will be part of an expanded pay-per-view service that could eventually produce $250 million to $500 million in annual revenue, the company said.

Despite the arrival of new services, the timing for a new combo DirecTV satellite receiver and TiVo DVR hasn’t been set, Pontual said. DirecTV and TiVo resumed development in 2008 after a three-year break, and the combined product was initially expected to be available in the first half of 2009. TiVo recently postponed delivery of the device to Q1 of 2011. Pontual declined to comment on the reasons for the delay, but he said if TiVo’s software development had been complete, “it would have been launched already.” TiVo’s platform will be deployed along with the one that DirecTV currently uses, which in the past has been developed by NDS.

Sales of advanced services have been a key growth driver for DirecTV, accounting for 75 percent of new subscribers, Chief Financial Officer Patrick Doyle said. Among new customers, 40 percent are selecting DirecTV’s MoCA-based multiroom DVR technology, which adds $3 to a monthly bill, Doyle said. DirecTV’s DVR carries a $7 monthly fee. At the investor meeting DirecTV demonstrated, in addition to MoCA, wireless technology for use with MoCA STBs that uses existing 802.11g technology “with a twist,” including putting three WiFi antennas in a router, Pontual said.

The wireless technology is being developed in parallel with the DirecTV Co-Pilot software application that will launch for Apple’s iPad in Q1, followed by versions for Apple iPhone and Android-based tablet PCs in Q3 and Q4, DirecTV said. The 6-MB app, which initially will be available through the Apple store and DirecTV’s web site, allows for control of a broadband-enabled DirecTV satellite receiver and personalization of program content in addition to providing an on-screen guide, it said.

With DirecTV reseller Verizon scheduled to launch its wireless 4G broadband service Sunday, DirecTV has been testing since September a fixed-line Long Term Evolution service through a “few homes” in Pennsylvania, CEO Michael White said. A “soup can"-size device was attached to the DirecTV satellite dish to receive the 4G signal from a cellular tower, DirecTV said. The signal is sent to the home over the same cable used for satellite feeds, it said. DirecTV and Verizon also have developed a 4G adapter that can be plugged into a HD satellite receiver, Pontual said.

DirecTV will have 19.1 million U.S. subscribers by year-end and will add “slightly less” than 600,000 net customers in each of the next three years, with monthly churn remaining flat at 1.5 percent, White said. DirecTV’s monthly churn for basic subscribers is 1.8 percent, but drops to 1.3 percent for those getting advanced services, Doyle said. DirecTV is targeting having 30 million subscribers, including those in Latin America, by 2013, White said. DirecTV had 3.2 million subscribers in Latin America as of Sept. 30, up from 2.7 million a year earlier.

In seeking to generate additional revenue, DirecTV will start delivering local targeted ads to set-tops in late 2011 with the bulk of sales expected to start the following year, Chang said. DirecTV has been limited to national ads. The new local service stems from DirecTV’s agreement signed this year with NCC Media, he said. NCC Media is an advertising sales company representing U.S. cable operators, giving DirecTV access to some of the same ads being placed with MSOs, Chang said. DirecTV’s local advertising business could eventually produce $200 million to $400 million in annual revenue, White said.