DirecTV Preps for 4K

Largest US satellite TV operator aims to be first pay TV provider to offer 4K Ultra HD service.

Alan Breznick, Principal Analyst, Heavy Reading

November 13, 2013

3 Min Read
Light Reading logo in a gray background | Light Reading

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

About the Author

Alan Breznick

Principal Analyst, Heavy Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like