Washington, D.C. (Nov. 20,
2011) --
In July 2008, DIRECTV
launched a
Net-enabled Video on Demand service; the satcaster crowed that
the new VOD offering would be as successful as cable's VOD
service.
“With our launch of our
on-demand service, not only is cable playing catch-up in the (HD
channel) world, they don’t have the differentiator of on demand
any more,” said Eric Shanks, then DIRECTV's executive vice
president. "I'm not quite sure where they will head now with
their marketing efforts."
Three years later, DIRECTV's VOD program features thousands of
movies and TV shows from dozens of channels. It should be a
major success, everything that Shanks said it would be.
But the program is a major bust -- and the
satcaster has no one to blame but itself.
And here's why:
Most streaming devices today come with Wi-Fi built-in, which
enables the consumer to connect to the Net by linking to their
home network. The process is relatively easy (although many
Americans still struggle with it; that's a story for another
day) because it doesn't require any additional equipment. The
viewer just follows an on-screen prompting, and after a few
clicks, he's watching video over the Net.
However, three years after launch, DIRECTV's VOD service still
does not have a simple wireless option. To connect his HD DVR to
his home network, the DIRECTV subscriber must buy a wireless
adapter, which can cost up to $50, hook it up to the set-top,
and then try to find his network's signal by following on-screen
prompts.
For the average person, buying the additional equipment -- and
installing it yourself -- is a hassle. And, for many people, a
technical nightmare. (This is not the tech-savvy nation some
people think it is.)
The other option would be for the subscriber to connect his
DIRECTV HD DVR directly to his home's main Internet port, which
is not very convenient because most Net ports are rarely located
near the living room television.
DIRECTV's VOD lineup is not so compelling that people will jump
through a bunch of hoops to watch it.
Does DIRECTV's Mike White have an answer for DIRECTV's VOD woes?
And if you don't believe me, just ask DIRECTV CEO Mike White.
The executive this month told Wall Street analysts in an
investors call that only 1.6 million DIRECTV subscribers have
their set-tops connected to the Net. That represents just eight
percent of the entire DIRECTV subscriber base and White said it
only reflects an increase of about 800,000 subs over the last
year.
"It's
probably still not anywhere
near enough," White said in an
understatement.
White added that DIRECTV has tried to help subscribers connect
to the Net during service calls. But he acknowledged that it's
been a challenge.
"Sometimes the customer said they had a router and
it turned out they had a modem. So we've had to get some kinks
out of the execution," he said.
In contrast, Cable's Video
On Demand service can be easily accessed by clicking on the On
Demand channel and then scrolling through the menus until you
find a show you want to watch. No special equipment is needed.
And that's why it's had some success; it's easy.
DIRECTV would do this, too, if it could. But unlike cable, a
satellite system does not have the space for a large library of
movies and TV shows. So DIRECTV has to use the Net to deliver a
VOD lineup that comparable to cable's VOD menu. (The satcaster
does offer roughly 50 channels of PPV movies that can be
accessed via the set-top but that lineup is just a small
percentage of what cable's VOD offers.)
Until DIRECTV offers a simple wireless solution -- a Wi-Fi-ready
set-top or more in-home installations (or
another idea) -- it will never be able
to compete with cable's VOD. That was true in 2008; it's true
now; and it could be true for years to come.
