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Old 10-20-2005, 02:49 PM   #331 (Print)
jcricket
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Quote:
Originally Posted by Dan Collins
In an environment where the status quo is maintained, satellite looses. They have to convince people to take the required action to switch. That is getting harder and harder to do, and the satellite providers are spending more and more money to make it happen.

I don't disagree with your general point, but as a matter of fact, satellite has been doing a good job of winning converts (at a rate of like 5%/year) for the last 2 or 3 years. I'm not sure what the "cost" of that acquisition is, but it's "working", and, in fact, I've seen evidence that it's working better in recent years than in the past (i.e. satellite has overcome some of the hurdles in consumers' minds).

Some fun facts: 85% of the country gets their TV from cable or satellite. The other 15% either use OTA antennas or doesn't watch TV. Those figures have remained static for nearly 10 years. What hasn't remained static is the cable vs. satellite proportions. Satellite has been steadily eating away at cable's lead.

Plus, it's not clear that bundles are always a good value (much like Wal-Mart isn't actually a price "leader" on most items) for consumers. How hard is it, really, to pay 2 or 3 bills. With auto-pay I hardly even notice.
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Old 10-20-2005, 03:08 PM   #332 (Print)
Stoystown
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Does it have 30-second skip??? That's the deal breaker/maker for me.
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Old 10-20-2005, 03:28 PM   #333 (Print)
Kanyon71
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Quote:
Originally Posted by Stoystown
Does it have 30-second skip??? That's the deal breaker/maker for me.


No one knows since it's not actually on the market yet. Once it hits we will all find out hopefully. I use 30 Sec skip all the time but honestly I can live without it and have actually found myself using FF a lot more lately for some reason.
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Old 10-20-2005, 04:38 PM   #334 (Print)
cfarm
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Quote:
Originally Posted by Dan Collins
That is getting harder and harder to do, and the satellite providers are spending more and more money to make it happen.


Cable and the RBOCs are spending a chunk of change as well. Network upgrades to provide the triple play don't come cheap. If you attend any networking industry trade show these days, triple play is all the buzz because everyone sees it as the current gravy train. Somebody is buying a TON of that hardware and it sure isn't DBS.
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Old 10-20-2005, 06:00 PM   #335 (Print)
AbMagFab
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Quote:
Originally Posted by Dan Collins
In an environment where the status quo is maintained, satellite looses. They have to convince people to take the required action to switch. That is getting harder and harder to do, and the satellite providers are spending more and more money to make it happen.


Exactly. So now the debate is, what does it take to convert someone?

I'd say one of the biggest is word of mouth. That is, someone you trust telling you it's a good thing. What does that require?

It requires the "leaders" to go and stay with Satellite, and tell others to do the same. Which then trickles through to even more folks.

Unfortunately, DirecTV is making a series of potentially bone-headed moves (drop Tivo, no HD additions, no wiring improvement, large dish upgrade), which will result in the "leaders" leaving, or at a minimum no longer telling people to convert. In the mean time, cable is making a series if advances. And of course you have the RBOC's coming around the corner from the outside.

There is a good chance that DirecTV rapidly falls by the wayside. First step is to see the new DVR's. Next step is the launch and availability timeframe for new HD (not just locals).

For DirecTV to think they can just market to the masses, and get conversions, is very narrow thinking on their part. Maybe 3-5% of the population are leaders that others look to. The rest are followers. And most won't switch unless someone they trust tells them it's a good idea.

Of course, there is that 10-15% untapped market out there, but that's very low-end and likely very hard to get to buy into anything.

In the meantime, if Cable gets Tivo DVR's soon, that will cause a swell in at least a number of "leaders" running to cable. And as the RBOC's release their service, we'll likely see the same shift.

The next 6-12 months will be very, very interesting.

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Old 10-20-2005, 07:50 PM   #336 (Print)
mtchamp
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My neighbor, whom I talked into getting DirecTV with TiVo has gone back to Comcast for VOD and their DVR and probably because of a special dump satellite deal. I know people with a TiVo who still watch way too much live TV and can't seem to grasp the concept of recording all their shows to be watched later, maybe their hard drive needs to be 300 hours.

I think some people can't be bothered to search for movies to record and they would rather have all those free movies on VOD and use the simple pause and rewind feature of the cable DVR. I also think many people see more value in paying for more movie channels or buying more PPV than paying for a TiVo subscription. Not all people think like TiVo. They just sit there and passively watch TV stuck in channel surfing bliss.

However, if you love your TiVo, you'll continue to love your DirecTV. Take TiVo away from a DirecTV customer and the list of reasons to stick with DirecTV is a short list compared to 5 years ago. DirecTV should have stuck with TiVo and turned on the USB ports and fully supported TiVo's features. Imagine how much more business DirecTV could have done by just allowing Home Media Option when it first came out. DirecTV would be way ahead of everybody as they used to be.

I think it's all downhill for DirecTV once Comcast supports a full featured TiVo or the CableCard TiVo comes out. On the same day they sell their first new NDS box, TiVo will probably sue NDS and DirecTV for patent infringement or maybe not, because I read that the NDS Sky+ box in the UK can't even pause and rewind live TV properly as I type.

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Old 10-20-2005, 08:27 PM   #337 (Print)
Dan Collins
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Quote:
Originally Posted by jcricket
I don't disagree with your general point, but as a matter of fact, satellite has been doing a good job of winning converts (at a rate of like 5%/year) for the last 2 or 3 years. I'm not sure what the "cost" of that acquisition is, but it's "working", and, in fact, I've seen evidence that it's working better in recent years than in the past (i.e. satellite has overcome some of the hurdles in consumers' minds).

Some fun facts: 85% of the country gets their TV from cable or satellite. The other 15% either use OTA antennas or doesn't watch TV. Those figures have remained static for nearly 10 years. What hasn't remained static is the cable vs. satellite proportions. Satellite has been steadily eating away at cable's lead.

Plus, it's not clear that bundles are always a good value (much like Wal-Mart isn't actually a price "leader" on most items) for consumers. How hard is it, really, to pay 2 or 3 bills. With auto-pay I hardly even notice.
Some more "fun facts" - It costs DirecTV over $600 to "convert" a cable subscriber to DirecTV (Dish Network spends slightly less, at least on paper, thanks to their lease arrangement). It costs a cable company an average of $400 to convert a satellite subscriber. Since a subscriber generates an average of $30 per month in subscription profit, it takes about 20 months for a subscriber to pay back his acquisition cost. That's up from 15 months in early 2004, and 12 months in early 2003. On top of this, DirecTV is spending around $3 billion dollars this year and next to launch new satellites. They are spending about $1 billion on new ground station equipment. They are spending around $500 million to develop new set top boxes and will spend at least that much doing equipment swaps. They will also spend around $200 million installing new dishes for HD subscribers.

Plus, for every 2 subscribers they add, they lose one. This is called churn, and the churn rate has been rising for the past 4 years.

They consider the cable "triple play" to be a significant enough threat to prompt them to partner with telcos. This is ironic, since the telcos eventually plan to compete with satellite.

Today, there are about 65 million cable subscribers and about 25 million or so satellite subscribers. Of those 65 million, it has been estimated that some 30 million can not use satellite for various reasons (they live in rental apartments and can't get permission, no line of sight, etc.). That leaves 35 million. Of those, what percentage will never switch because they LIKE the cable package and don't see the advantage of satellite?

Don't get me wrong...satellite will continue to grow. But the cost structure is heading down the path of diminishing returns. At some point, they will no longer be able to afford to pay what it takes to get new subscribers.

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Last edited by Dan Collins : 10-20-2005 at 09:51 PM.
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Old 10-20-2005, 08:29 PM   #338 (Print)
dbronstein
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Quote:
Originally Posted by mtchamp
Take TiVo away from a DirecTV customer and the list of reasons to stick with DirecTV is a short list compared to 5 years ago.


That should read "Take TiVo away from the very small minority of DirecTV customers who drink the Tivo koolaid and the list of reasons to stick with DirecTV is a short list compared to 5 years ago."

Even if everyone who subscribes to DirecTV solely for Tivo leaves, it will just be a blip on the radar. They are going to lose a lot more people over HD locals than they will over Tivo.
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Old 10-20-2005, 09:43 PM   #339 (Print)
jfh3
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Quote:
Originally Posted by dbronstein
Even if everyone who subscribes to DirecTV solely for Tivo leaves, it will just be a blip on the radar. They are going to lose a lot more people over HD locals than they will over Tivo.


That may be true, but one customer lost because of DTVs Tivo position is one that didn't have to be lost.

The point is DTV is taking a number of actions that will cost them customers.
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Old 10-20-2005, 09:55 PM   #340 (Print)
Adam1115
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Quote:
Originally Posted by Dan Collins
Cable brings all channels (SD and HD), and high speed internet, into your home on one cable. They supply a multi-tuner DVR with one cable. DirecTV requires at least 4 cables into the house, and one cable per tuner. They are resorting to stacking for the Ku/Ka future, but that just keeps it down to 4, rather than expanding it to 8, cables coming in. You still need at least 2 cable runs per DVR.

To grow the business, this is a handicap. As Microsoft will tell you, the key to taking over a category is to be compatible with the incumbent technology (that's why Excel imported Lotus 1-2-3 and Word could read Wordperfect files). Telling people that they need lots of new coaxial cable installed, and the expense and inconvenience involved, just raises the bar for satellite. DirecTV (and Dish Network) need to be that much better to win over new customers.

We have been focusing on TiVo's effect on DirecTV. I agree that this is minor, in the scheme of things. DirecTV (and Dish Network) face some significant challenges.

The "triple play" offering of cable (TV, broadband and phone) is seeing significant customer uptake. The convenience and economies of this package are compelling. Satellite can not offer anything like it. To convince people to unbundle their TV service will require a very compelling story. If, as many here seem to believe, most people can't tell one DVR from another, then DVRs have NO influence on this at all. In terms of PQ, digital cable is every bit as good, if not better, than satellite. In terms of channel offerings, larger urban and suburban cable systems are at LEAST as complete as satellite, in many cases they have wider selections.

So, what compelling advantage does satellite offer over cable? NFL Sunday Ticket? Okay, but can that hold? DirecTV only has about 3 to 4 million NFLST subscribers (which makes it only slightly larger than the TiVo portion of the base). Is Customer Service a compelling advantage? As cable improves, it seems DirecTV deteriorates, so I wonder how influential this can be.

This is why all the analysts are predicting sharply lower growth rates for satellite in the future. This is true regardless of the DVR software they use.


Your 'sort of' right..

But I switched to DBS because our cable company only offered analog, and STILL doesn't have a DVR.

In big cities, I don't see how Sat can compete, but it is their goal. In rural america, satellite is #1, even with 16 coax cables...

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Old 10-20-2005, 10:43 PM   #341 (Print)
cfarm
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Quote:
Originally Posted by Dan Collins
....They are spending around $500 million to develop new set top boxes .


Not even close......Rearden Steel didn't spend anywhere near that kind of money and they were doing theirs from scratch in 2000-2001 and using Intel CPUs for software decoding.

STBs are MUCH more cookie cutter today and nobody spends that kind of change, especially with reference designs being available from the chipset companies.
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Old 10-21-2005, 09:33 AM   #342 (Print)
dbronstein
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Originally Posted by jfh3
That may be true, but one customer lost because of DTVs Tivo position is one that didn't have to be lost.

The point is DTV is taking a number of actions that will cost them customers.


But they obviously feel that they are going to gain more customers by making their own DVRs than they are going to lose. Time will tell if they are right.
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Old 10-21-2005, 09:42 AM   #343 (Print)
SpacemanSpiff
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I quess we could question whether they will gain more by marketing their own design over marketing the existing design.
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Old 10-21-2005, 10:23 AM   #344 (Print)
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Question DiecTv Home Media Center

I have not seen any info in this thread about one of the biggest features of the R15, DirecTv's ( damm - I get tired of their *cutesie spelling - call it "DirectTv" already) Home Media Center.


DIRECTV Debuts Home Media Center at CES Trade Show

DirecTV @ CES - Home Media Center and new channels

US cable and satellite operators race to introduce multi-room DVR
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Old 10-21-2005, 10:47 AM   #345 (Print)
cfarm
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Originally Posted by pgorbas
I have not seen any info in this thread about one of the biggest features of the R15, DirecTv's ( damm - I get tired of their *cutesie spelling - call it "DirectTv" already) Home Media Center.




I don't believe the R15 is intended to be a HMC base. The CES reference was to a Motorola/Ucentric product. That product is also HD capable, whereas the R15 is not.
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Old 10-22-2005, 02:57 PM   #346 (Print)
jfh3
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Quote:
Originally Posted by dbronstein
But they obviously feel that they are going to gain more customers by making their own DVRs than they are going to lose. Time will tell if they are right.


I've never read anything that would indicate this. It was all about saving a buck a month (which they're getting back anyway by raising the DVR fee).

What you're telling me is that they think they can essentially sell more generic flakes than Wheaties? Unless the generic costs a lot less, most would rather have Wheaties.

DTV has banked on the assumption that Tivo doesn't make a difference. As you say, time will tell if they are right.

I'm with DTV as long as my Tivo box works or until Comcast offers a Tivo box that doesn't have three-year old Tivo software on it.
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