Direct TV will soft launch local HDTV

The satcaster will quietly test the new service in one city or two before launching nationally. But 24 markets will get local HDTV this fall.
by Phillip Swann Washington, D.C. (June 14, 2005) -- Direct TV has announced that it will offer
High-Definition TV feeds of local channels in 24 markets this fall. This will be the first

 
time that Direct TV will provide viewers with local high-def coverage.

However, I predict that the satcaster will first test the local HDTV service in one market before launching the service elsewhere. The test could delay the 24 market national
launch until late September or early October. At this time, I am not ready to predict
which market will be tested.

The reason for the one-city test: The local HDTV signals will be delivered via a new Ka
band satellite, which was launched in April, and a new compression technology called
MPEG-4. Consequently, the satellite TV service must take special care to ensure
that the new satellite -- and the new technology -- is a-ok before going national.
(Direct TV currently uses MPEG-2 compression technology to deliver TV signals.)

The limited market test would not be unprecedented for Direct TV. The satcaster has
been testing its new Interactive TV service, called Direct TV Active, in selected cities
before launching nationally. The Interactive TV test, which began a few weeks ago, is expected to take up to 30 days.

Eagerly Awaited
Direct TV's local HDTV service has been eagerly awaited by high-def owners. As of
now, HDTV signals of local channels are only available via cable TV -- or an off-air
antenna. (Direct TV does provide national HDTV signals of ABC, CBS, Fox and NBC in selected markets.) The satellite TV service hopes that the addition of local HD will stop new HDTV owners from signing up for cable.

Direct TV plans to offer local HD -- and up to 150 national HDTV channels -- in nearly
every market by 2007. The satcaster is launching four new satellites over the next two
years to deliver those signals.

Shortly before this fall's launch of the first 24 markets, I predict that Direct TV will
begin selling new MPEG-4 dishes and receivers, which will be needed to receive the
local HDTV signals. However, I am not ready to predict at this time if Direct TV will
offer discounts and incentives for current customers to upgrade to the MPEG-4
systems. (It is likely, though.)

I will predict, though, that Direct TV's 24 market roll out of local HDTV will be done in
two stages. Direct TV has announced that the first 12 markets will be: New York, Los
Angeles, Chicago, Philadelphia, Boston, San Francisco, Dallas, Washington DC,
Atlanta, Detroit, Houston, and Tampa Bay.

In the next few weeks, I predict that Direct TV will announce 12 additional markets
that will get local HDTV this fall.