DirecTV delays its HD DVR (again) until the fall

[HDTV News Poster]

DirecTV delays its HD DVR (again) until the fall (http://hdtv.engadget.com/2006/07/25/directv-delays-its-hd-dvr-again-until-the-fall/)

We can't blame DirecTV subscribers for getting a little antsy over the company's HD DVR (http://www.engadget.com/2006/04/03/directv-shows-off-1-500-d-hr20p-hd-dvr/) that has yet to materialize -- after all, it was originally scheduled to drop early this year -- so the fact that this highly-anticipated product has once again been delayed until the fall will probably cause some very understandable frustration. The satellite TV provider recently sent wait-listed customers a letter explaining that the box is undergoing additional testing to ensure smooth operation (yeah, we've heard that line before), and that it's now set to ship in "the September/October time frame." One skeptical analyst over at Sanford C. Bernstein, however, feels that the delay is actually due to inventory shortages, and that DirecTV is only putting off the inevitable cost it will incur from a new product deployment. Bernstein's Craig Moffett went on to speculate that the company's procrastination may actually cause some subscribers to flee to (future partner? (http://www.engadget.com/2006/07/24/directv-and-echostar-talking-merger-again/)) Dish or cable, but his analysis doesn't seem to take into account the somewhat-crippled and limited HD TiVo already available to DirecTV's customers. Still, these habitual delays are certainly doing nothing to bring new subscribers into the fold, so we humbly suggest that DirecTV give their testers a few cases of Red Bull and some serious overtime to get this thing out the door as quickly as possible.

http://www.blogsmithmedia.com/www.engadget.com/media/2006/07/dtvhddvr.jpg (http://www.multichannel.com/article/CA6355813.html?display=Breaking)

[Scott]

Not a big surprise here...

[NormalGuy]

This is strange b/c I am being told that I can get an H20 whenever I order.

NG

[Scott]

I saw your post in the D* thread and was about to link you to this thread. I was told last week by D* that I was authorized to receive a free HD DVR due to my customer status--I asked if it were the HR10 or the HR20 and was told it was the HR20. I said "sure, send it to me" and a couple of days later I received another call from D* stating that there was a mixup, the HR20 was not available and offered me 6 months of Showtime for free. Keep us updated and let us know if you receive one.

[Scott]

Here is the text from the original article:

DirecTV HD DVR Delayed Again (http://www.multichannel.com/article/CA6355813.html?display=Breaking)

<hr style="padding-bottom: 10px;" color="" noshade="noshade" size="1" width="100%"> By Linda Moss 7/24/2006 11:06:00 PM

DirecTV once again delayed the rollout of its new HD digital-video recorders, which could make impatient subscribers switch over to competitors EchoStar Communications or cable, a Wall Street analyst said Monday.

In a report, Sanford C. Bernstein analyst Craig Moffett wrote that DirecTV’s churn rates could rise because of yet another postponement of the deployment of its state-of-the-art dual-tuner HD DVRs.

“There is obviously a limit to how long customers -- who, after all, have just spent large amounts of money on a flat-panel HDTV -- will be willing to wait for an upgrade from DirecTV before they simply switch to a competitor instead,” Moffett wrote. “EchoStar and cable operators could benefit.”

Moffett cited a letter that DirecTV is sending to customers on a wait list for the HD DVRs. The direct-broadcast satellite provider said the new HD DVRs -- originally expected early this year, then pushed back until spring -- are now set to be available this fall. He blamed the delay on a lack of product inventory.

“We believe shortages of the combination HD DVR unit have contributed to DirecTV falling behind cable competitors in HD readiness,” Moffett wrote. “HDTV penetration of digital subscribers among cable operators appears significantly higher than at DirecTV.”

But in what he calls “the bizarre calculus that is the DBS industry,” Moffett said the glitches in getting the new DVRs to subscribers in some ways will help DirecTV’s bottom line in the short term, since the upgrade involves “significant” costs to the company.

“More delays for the HR20 should translate into better near-term financial results, since upgrades are a key driver of retention-marketing expense [and capital expenditures such as upgrade equipment are now capitalized under their new leasing plan],” Moffett wrote. “Lower retention marketing means higher EBITDA [earnings before interest, taxes, debt and amortization] and higher earnings … But we’re skeptical that investors will continue to give DirecTV a free pass, however, as the future upgrade requirement is clearly growing.”

The analyst also made reference to a plan announced last week by News Corp.’s British Sky Broadcasting to provide free broadband service to its subscribers in Great Britain. News Corp. owns 38% of DirecTV, which doesn’t have a broadband offering yet.

“News Corp.’s willingness to slash cash flows at BSkyB would appear to raise the risk of an unwelcome surprise in capital spending related to plans for a terrestrial broadband network at DirecTV, as well,” Moffett wrote. “Even if the business were to be built off-balance-sheet, subscriber-acquisition costs associated with the broadband venture could directly and significantly impact DirecTV’s cash flows.

A Federal Communications Commission auction for the so-called AWS (advanced wireless services) spectrum begins in a several weeks, he noted.

"We’re not far off the timetable we established earlier this year," DirecTV director of public relations Robert Mercer said. "We are completing some additional testing on the software to ensure that the box is operating smoothly when we begin shipping to consumers nationwide in the September/October time frame. The receiver's performance thus far has been exceptional. and we're looking forward to the launch."

[gruxx]

Things seem to be in HD chaos at D*. And some of their subscribers are freaking out.

You have the Tivo people who are freaked about the HR20 and the NDS designed DVR. .tivocommunity. (http://www.tivocommunity.com/tivo-vb/forumdisplay.php?f=36)

You have the Own v Lease people who are freaked that they spent $1000 on the HR10, and they will have to shill out $$$$$ for the HR20 or lease it. .satelliteguys. (http://www.satelliteguys.us/forumdisplay.php?f=11)

You have the mpeg 4 people who are freaked that E* is passing D* in the number of HD channels available. .dbstalk. (http://www.dbstalk.com/forumdisplay.php?f=90)

There are those who are freaked because the HR10 is a mess of a box compared to other HD-DVRs. It's crippled. It's buggy. It has a high failure rate. .avsforum. (http://www.avsforum.com/avs-vb/forumdisplay.php?f=42) (and all three other forums above)

this delay only stokes the freak out fires on the forums I've linked to.

D* needs to do something right soon, or Dish and Cable subs will surely increase.