Liberty Buy Could Ease DirecTV-EchoStar Relations, Ergen Says
LAS VEGAS -- Liberty Media’s pending purchase of News Corp.’s majority stake in DirecTV could improve its relations with EchoStar, but chances of a merger are remote pending completion of the deal, EchoStar CEO Charles Ergen told a news conference here Mon. EchoStar lost a bidding war for DirecTV to News Corp. nearly 4 years ago, but if Liberty is the new owner options exist for sharing backhaul, delivery of backhaul and backup satellites, Ergen said.
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Liberty’s proposed acquisition of News Corp.’s 38.5% stake in DirecTV won’t be complete before year-end, Ergen said: “We'll see what it looks like after that.” DirecTV CEO Chase Carey, expected to remain the satellite service’s top executive under new ownership, said “synergies” exist with EchoStar, such as the companies’ joint bid during the auction of wireless spectrum. But “clearly there would be regulatory issues” that remain, Carey said.
Carey sought to cool speculation that under new owners DirecTV might rethink its agreement with NDS for PVRs. For years, DirecTV sold combo satellite receiver/TiVo PVRs, before switching in 2005 to software from News Corp. affiliate NDS. The initial NDS-based product had glitches, all of which were resolved, Carey said: “We think it’s a pretty competitive product right now.”
Possibilities of merger between EchoStar and DirecTV aren’t quelling competition between the satellite companies. Both unveiled plans for on-demand video services. DirecTV has renamed what once was called Direct Flix DirecTV on demand and plans to launch a beta Q1, with formal introduction Q2, said Entertainment Vp Eric Shank. The service will feature a menu with existing channels slightly rebadged -- on-demand HBO will be 1000501 vs. 501 in the standard DirecTV package. The service also will have access to the about 100 HD channels that DirecTV expects to have on line by year-end, Carey said. DirecTV is near or in carriage agreements for 70 channels, he said. Access to HD channels likely will be gated by DirecTV’s continued switch out of MPEG-2 set-top receivers with MPEG-4 versions, a process not expected to be complete for “couple of years,” Carey said. While DirecTV hasn’t finalized HD plans, it will use existing STBs, with HD fare sold in packages like those accompanying the SD line-up, company officials said. In June, DirecTV will expand capacity, launching 2 satellites. EchoStar also plans to launch EchoStar-11 later this year.
For its part, EchoStar will ship a new version of its 622 PVR, boosting hard drive capacity to 500 GB from 320 GB a year ago. The ViP622 will be free with EchoStar’s new Digital Home Advantage program and have access to the DishDVR Advantage package, packaged with America’s Top 200 channel package at $49.99 monthly. HD content will be pushed to the ViP622’s hard drive, a portion of which will be used to store content, Vp Mark Jackson said. EchoStar also will launch its first mobile TV package for motor vehicles under an agreement with Raysat, which will provide hardware. The 100-channel service is expected to be available later this year. The mobile TV service likely won’t include Sling Media technology despite EchoStar’s investment in the company, Jackson said. EchoStar isn’t convinced it would get enough uptake from subscribers to justify adding the Sling to the service, Jackson said.