DIRECTV AND NEWS CORP. TO DEVELOP COMMON HARDWARE PLATFORM
With News Corp.’s acquisition of Hughes Electronics and DirecTV expected to close by the end of the year, work is under way to create a common hardware platform that could be implemented across multiple satellite services by late 2004, DirecTV CEO Eddy Hartenstein told us in an interview Thurs. at the SkyForum in N.Y.C.
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The goal will be to mesh DirecTV’s satellite platform with those of other News Corp. services such as BSkyB, Sky Italia, Sky Latin America and Star TV, with the rationale that by creating a single platform, News Corp. would be able to reduce hardware costs, Hartenstein said. “Those can all have a common setup of functions even though the screen may come in a different language or a different format,” he said. “The guts of that box is the same across 7 worldwide platforms as opposed to just 1 in the United States, and that will be quite a saving.”
Among the issues likely to arise in the effort to create a common platform will be DirecTV’s alliance with TiVo to build a combo satellite receiver/PVR. It’s an issue that’s likely to grow more important next year as DirecTV introduces a model with a 250 GB hard drive and 2 ATSC tuners. Hartenstein said the number of DirecTV subscribers with TiVo service was projected to reach 775,000 by the end of this year, with an additional million expected in 2004.
In addition to the commercial services that will be available when the first of its Spaceway satellites launches in the first quarter, Hughes is considering using a portion of the transponder space for delivery of high-definition programming, Hartenstein said. No final decisions have been made, executives said, but portions of the Spaceway satellite could be converted for HD use from the uplink facilities. DirecTV currently offers 7 HD channels. The Spaceway satellites are expected to be launched in 6-month intervals beginning in 2004’s first quarter. Hartenstein said “there’s plenty of capacity there” for Hughes Network Systems to “fulfill their business plans and looking at fulfilling some of ours as well.”
Discussing the potential impact of News Corp.’s purchase of Hughes and DirecTV, EchoStar CEO Charles Ergen struck a conciliatory tone at SkyForum when he said he believed the acquisition would strengthen the satellite industry. But he said he remained concerned about the potential for News Corp. to limit access to Fox programming, a fear that Hartenstein said would be proved to be unfounded. “Whether we do better or worse will be up to us,” Ergen said. Referring to News Corp., he said: “You always want to go up against the best and in this business they are the best.” Those comments were in stark contrast to his more combative tone in the past, particularly after a 1997 EchoStar-News Corp. merger deal collapsed.