DirecTV will continue to support existing WildBlue customers, but the company is exploring "opportunities with a variety of broadband service providers to support DirecTV's connected home experience, including our VOD and data needs," the company said in a statement. The company declined to say how many of WildBlue's 400,000 subscribers take DirecTV's service. WildBlue has not commented.
Citing internal communications at DirecTV, The Morning Bridge reported Friday that the satellite TV giant is advising resellers to stop selling WildBlue service or supporting speed upgrades. Taking it a step further, it urged resellers to "avoid mention of the service" altogether. DirecTV alluded to working on a new satellite broadband bundle, and the report speculates that a deal with HughesNet, now a wholly owned subsidiary of EchoStar Corp. LLC (Nasdaq: SATS), could be in the making.
At one point, DirecTV tested a potential bundle tying its video service with an Long Term Evolution (LTE)-powered Internet service from Verizon Wireless . But that option has apparently come off the table in the wake of Verizon Wireless's new cable partnerships. (See Verizon Ditches DirecTV LTE Plans for Cable.)
DirecTV, which still has reseller deals with Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T), offers about 7,000 movies and TV titles on-demand to IP-enabled receivers, but relies heavily on broadband connections to get them there.
WildBlue recently launched a 12Mbit/s downstream tier in Colorado for $50 per month, with national availability slated for later this month. However, the company, which tends to target rural markets, has been criticized for employing strict consumption caps that hinder the use of over-the-top video applications.
Why this matters
DirecTV's pursuit of new broadband options shows how important it's become for satellite TV companies to have a high-speed Internet weapon in their arsenals. Not only are their customers complementing their video needs with content from the Web, but satellite TV companies are also leaning more heavily on broadband to deliver some of their core services. Dish Network LLC (Nasdaq: DISH), for example, hasn't been too proud to develop bundling deals with rival Charter Communications Inc. , which is styling itself as a broadband ISP these days. (See Charter Ready to Give DSL a Thrashing .)
"DirecTV may be seeing the writing on the wall that they need a full, robust broadband service," says Jim Stroud, principal analyst at Blackbird Communications. "They've probably realized that WildBlue is good at serving a niche market, but that's about it."
Read more about satellite broadband.
- WildBlue Cranks Up Satellite Broadband Speeds
- EchoStar Shells Out $2B For Hughes
- ViaSat Acquires WildBlue
- WildBlue Makes Stimulus Pitch
- Hughes Preps High-Speed Bird
— Jeff Baumgartner, Site Editor, Light Reading Cable