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DirecTV Preps for 4K

Alan Breznick
11/13/2013
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Despite nagging concerns about the complexities of upgrading to 4K UltraHD video, DirecTV is gearing up to be the first pay TV provider to offer 4K in the US.

DirecTV Group Inc. (NYSE: DTV) president and CEO Mike White spelled out that intention during the company's third-quarter earnings call last week. Speaking to financial analysts, he said the satellite TV giant is preparing for the nationwide introduction of 4K video as soon as the technology appears to be eady for prime-time.

"We are working on it," White said. "We'll be ready."

Indeed, as Fierce Cable reported back in February, DirecTV has already filed for trademarks on a bunch of 4K brand names, including 4KN, 4KNET, and 4K Network. So it could use any of those names for a new 24-hour devoted to 4K video programming.

That could set up an interesting race to market with such leading cable operators as Comcast Corp. (Nasdaq: CMCSA, CMCSK), which has also been working on its technical capabilities for 4K and demonstrated UltraHD programming for its NBC Universal unit at the Cable Show in June. It also sets up an interesting match with such leading over-the-top (OTT) providers as Netflix Inc. (Nasdaq: NFLX), which has already launched 4K trials. (See: Netflix Launches 4K Video Trials.)

After getting burned with similar ambitions for a new full-time 3D network, however, DirecTV is moving ahead a bit more deliberately this time around, White said. DirecTV, which once had high hopes for its pioneering n3D network, scaled it back to a part-time channel last year and now doesn't even bother to promote it any more.

"After the experience with 3D, I think there's a level of 'protect your options,' because it's a very complex rollout that would be required," said White. He noted that consumers will need new TVs and new set-top boxes to receive 4K, while pay TV providers will need a new video compression scheme to deliver it. He also noted that "very, very few homes in America" now have a TV capable of playing 4K.

"Everybody is working on pieces of that, and I do think you'll see a little bit more of it next year," White said. But he doesn't believe that 4K will have "any kind of material impact" on the US TV landscape until 2015 or 2016.

DirecTV CFO Patrick Doyle said his company's new satellites under development haven't been designed specifically for 4K. But he asserted that they could handle UltraHD video if need be. "If 4K takes off, we're in a good position as far as capacity."

Although DirecTV made a run at Hulu LLC earlier this year, White all but ruled out another attempt to buy out a large, general, OTT video service. Instead, he said, the satellite TV provider may take aim at a more targeted over-the-top service. "We have some ideas but I'm not ready to discuss them." (See: Hulu Brings in Billion-Dollar Bids.)

DirecTV officials said they're more focused now on building up their broadband, video-on-demand, and pay-per-view businesses. Noting that the provider has "seen a significant uptick in use of our on-demand channels," White said DirecTV will launch more on-demand channels later this year.

Despite the heavy video subscriber losses that Time Warner Cable Inc. (NYSE: TWC) reported for the third quarter, largely as a result of its retransmission-fee brawl with CBS Corp. (NYSE: CBS), DirecTV did not see much gain from the fallout. While the company netted 139,000 new customers in the quarter, more than double the 67,000 that it gained a year earlier, White credited most of the increase to lower customer churn rates. (See: TW Cable Hemorrhages Subs.)

"It had a very modest effect on our gross adds, well less than 5 percent," said White, who eschewed special promotions aimed at TW Cable subs in New York, Dallas, and Los Angeles who lost their CBS programming for a month. "It was kind of the whipped cream on top of our gross adds."

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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peppi134
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peppi134,
User Rank: Light Beer
6/5/2014 | 1:52:20 PM
DTV UHD
I think it's crazy DTV is charging a premium for 6 HD 1080i channels, still have a ton of non hd channels and are preping for 4K??  How about getting the rest of your channels up to speed first.
OaklandVC
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OaklandVC,
User Rank: Light Beer
4/12/2014 | 9:17:02 PM
4K is the next CE driver....
Nobody wanted 3D with the glasses and ok effects.  What people want is resolution and that will drive mass adoption.  The OEM's will quickly switch to 4K as soon as there's content avaiable.  Getting pixels to the end user is another story through, might be a opportunity for the over air broadcasters as they are the only ones actually broadcasting uncompressed 1080i.  

 

If you're still skeptical, see one.  If you've seen it in person that will end the argument....
albreznick
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albreznick,
User Rank: Blogger
11/13/2013 | 11:20:17 PM
Re: Still a Skeptic
yeah, I can't see how you get much value out of 4K on a little cell phone screen. You're going to need a goodsized TV set to really appreciate it. But I don't think you'll necessarily need a larger set than you have today. The difference is really striking and you don't need those goofy 3D glasses anymore, Sarah. Sell them off on eBay now while you still have a chance.  
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
11/13/2013 | 3:46:09 PM
Re: Still a Skeptic
Ah, well I was speaking to Broadcom about the potential for 4K on mobile devices, and they didn't think there was much because the screen was so small. The exec said you had to be relatively far away from the TV screen and it had to be large to take advantage of it, much like in a movie theatre where 4K is already taking off.
tb100
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tb100,
User Rank: Moderator
11/13/2013 | 3:43:35 PM
Re: Still a Skeptic
You have it backwards. You want to sit closer to be able to better appreciate and enjoy the higher resolution. A small living room is ideal.

I've seen 4K TVs for sale for $1300. I remember back when flat screens first came out and the friends who like to brag about their equipement were paying up to $4000 for their TVs. You don't need glasses. Anyone visiting your house can sit down and enjoy it. I was impressed with a 4K demo I saw.

I think that there's a good future for 4K.
Sarah Thomas
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50%
Sarah Thomas,
User Rank: Blogger
11/13/2013 | 3:07:50 PM
Re: Still a Skeptic
I'm less skeptical than I was with 3D (although I have a 3DTV with two pair of glasses I've never used...) How big does your TV need to be and how far back do you have to sit to make it worthwhile? I'm afraid my living room is too small to get the full benefit of it.
Carol Wilson
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50%
Carol Wilson,
User Rank: Blogger
11/13/2013 | 2:53:27 PM
Still a Skeptic
I remain skeptical about the impact of 4K and even more skeptical about its value as a competitive advantage. 
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