It seems that DirecTV sees the end of satellite and the continuation of more terrestrial operations. Or they are just trying to expand their offerings. Expanding into a subscription-based premium movie service would put them in direcT competition with Netflix and several other studios who are doing their own thing, like Disney. Tests are expected to begin later this year and perhaps a larger launch, if successful, next year or so.
They are aiming at giving subscribers access to new films only 4-6 weeks after they are released in theaters with a larger price tag. As I just said in my Disney article, pricing is going to be key. Disney is charging $14.99 for new films to have unlimited streaming access and $3.99 for 48-hour rentals. I can’t see how DirecTV would be able to charge anything more than that really. I certainly wouldn’t pay more than $5 for a one or two-day rental of a new film, even as soon as 4-6 weeks after release.
However it seems that this first phase is really aimed at streaming rentals as they also mentioned that they are looking at selling streaming access on the same-day as DVD release. So that would then equate to the permanent access plan that Disney is offering for $14.99. This could certainly give them better footing against some cable companies like TWC and Comcast as well as Netflix.
It looks like the race is on to be the premium provider of on-demand video inside of the 6-week after theater release as well as DVD-release day sales. This could allow the studios to tap into the 850,000 DirecTV subscribers who are already tying together their satellite box with broadband Internet which then offers then tenfold more movies-on-demand. With a hug jump in subscribers (the best in a decade) DirecTV already has a set-top box to stream to in millions of homes and wants to get the combo satellite-broadband connection in up to 40% of its subscribers homes by 2013. They are reported to have 19.2 Million subscribers as of end of 2010. That could be more than 10 million if their growth continues as it has done. It added 289,000 people in Q4 2010 which is about a million new subscribers a year
The broadband they’re pushing is most likely from AT&T and Verizon as they have deals to resell their services. They will most likely start bundling satellite and Internet in the near future but have not set any packages or pricing as of yet. With speed up to 25Mbs it would be great for HD streaming. There were indications that it might be in the $100 per month range.
On their earnings call they also mentioned working with mobile providers on LTE which could also translate into mobile video streaming availability in the future.