Yeah, this news broke a few weeks ago.
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DirecTV Spaceway sats to be used for hd
DirecTV to Write Down Value
Of Internet-Via-Satellite Effort
Abandoned Project Creates
A Noncash Pretax Charge
Of as Much as $1.6 Billion
By ANDY PASZTOR
Staff Reporter of THE WALL STREET JOURNAL
October 25, 2004; Page B5
DirecTV Group Inc., formally abandoning its Internet-via-satellite efforts, said it will take a third-quarter charge to write down the value of its long-pending Spaceway project by as much as $1.6 billion.
In a filing last week with the Securities and Exchange Commission, the nation's No. 1 satellite broadcaster said it plans to take a noncash pretax charge of between $1.4 billion and $1.6 billion for three Spaceway spacecraft that haven't yet been launched. The size of the impairment charge -- which could amount to as much as 84% of the project's previous $1.9 billion book value -- appears to kill any lingering hopes by the El Segundo, Calif., company of eventually using the satellites for their intended purpose.
Earlier this year DirecTV decided that the Spaceway satellites would be shifted to expand the company's high-definition video-broadcasting capacity. But the company still held open the possibility of eventually using part of them for broadband services and Internet connections.
Last week's filing, however, seems to slam that door shut. The decision to use the Spaceway satellites to beam video programming to DirecTV customers "triggered a requirement" to determine the extent of impairment of those assets, according to the filing.
Manufactured by Boeing Co. and viewed by industry officials as the most complex commercial-communications satellites ever assembled, two of the spacecraft are expected to be launched next year. The third satellite is a spare intended to stay on the ground. While Boeing has maintained that the satellites mark the future of the space industry, so far it has found few commercial customers and early versions of it have suffered serious defects.
Since News Corp. gained a controlling interest in DirecTV late last year, the satellite-to-home broadcaster has stepped up subscriber growth and put in place various plans to enhance video services. But from the beginning, News Corp. and its chairman, Rupert Murdoch, have been cool to the concept of using satellites to provide Internet access. Instead, DirecTV is looking to team up with telephone companies to offer an array of bundled services, including fast Internet connections.
A DirecTV spokesman couldn't reached to comment.
Of Internet-Via-Satellite Effort
Abandoned Project Creates
A Noncash Pretax Charge
Of as Much as $1.6 Billion
By ANDY PASZTOR
Staff Reporter of THE WALL STREET JOURNAL
October 25, 2004; Page B5
DirecTV Group Inc., formally abandoning its Internet-via-satellite efforts, said it will take a third-quarter charge to write down the value of its long-pending Spaceway project by as much as $1.6 billion.
In a filing last week with the Securities and Exchange Commission, the nation's No. 1 satellite broadcaster said it plans to take a noncash pretax charge of between $1.4 billion and $1.6 billion for three Spaceway spacecraft that haven't yet been launched. The size of the impairment charge -- which could amount to as much as 84% of the project's previous $1.9 billion book value -- appears to kill any lingering hopes by the El Segundo, Calif., company of eventually using the satellites for their intended purpose.
Earlier this year DirecTV decided that the Spaceway satellites would be shifted to expand the company's high-definition video-broadcasting capacity. But the company still held open the possibility of eventually using part of them for broadband services and Internet connections.
Last week's filing, however, seems to slam that door shut. The decision to use the Spaceway satellites to beam video programming to DirecTV customers "triggered a requirement" to determine the extent of impairment of those assets, according to the filing.
Manufactured by Boeing Co. and viewed by industry officials as the most complex commercial-communications satellites ever assembled, two of the spacecraft are expected to be launched next year. The third satellite is a spare intended to stay on the ground. While Boeing has maintained that the satellites mark the future of the space industry, so far it has found few commercial customers and early versions of it have suffered serious defects.
Since News Corp. gained a controlling interest in DirecTV late last year, the satellite-to-home broadcaster has stepped up subscriber growth and put in place various plans to enhance video services. But from the beginning, News Corp. and its chairman, Rupert Murdoch, have been cool to the concept of using satellites to provide Internet access. Instead, DirecTV is looking to team up with telephone companies to offer an array of bundled services, including fast Internet connections.
A DirecTV spokesman couldn't reached to comment.
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1 - 16 of 16 Posts
Quote:
Umm, check the byline. This is today's date, no? It seems that the news here is that DirecTV is making it known with little doubt that it's not interested in pursuing the broadband services.
Quote:
Not being an accountant, I'm mostly disinterested in the content of this article, but there's one sentence that caught my eye with respect to the prospects for a future HD programming explosion:
Quote:
| Originally posted by CycloneGT Yeah, this news broke a few weeks ago. |
Quote:
| the company still held open the possibility of eventually using part of them for broadband services and Internet connections. Last week's filing, however, seems to slam that door shut. |
Quote:
| While Boeing has maintained that the satellites mark the future of the space industry, so far it has found few commercial customers and early versions of it have suffered serious defects. |
Hey, maybe our whining about picture quality triggered this move. Perhaps they decided that HD customers ACTUALLY CARE about PQ and will find the best wherever they can. I can dream, can't I?
Anyway, this is very good news, since I don't think anyone actually cared about satellite internet.
Anyway, this is very good news, since I don't think anyone actually cared about satellite internet.
What effect does this have on its current DirecWay service?
To be clear, the only "new news" is the writedown. The decision was indeed reached and announced weeks ago. This is an accounting / Sarbanes Oxley / etc. thing.
As for DirecWay, it has no effect at all.
As for DirecWay, it has no effect at all.
I'm no accountant but i'm curious what they took a write-down for.
Sounds to my layman's ears that they believe the amount of revenue that they generate from the says for HDTV will be less than what they could (or used to think they could) get from selling internet.
is that the basic gist?
I wonder what the write down would have been if they kept them for internet? ISnt the ocnsensus that they could make even less money with that?
Sounds to my layman's ears that they believe the amount of revenue that they generate from the says for HDTV will be less than what they could (or used to think they could) get from selling internet.
is that the basic gist?
I wonder what the write down would have been if they kept them for internet? ISnt the ocnsensus that they could make even less money with that?
Quote:
I can't say too much as a former employee, but I do wonder when the last time DirecTV posted a *profit* for a quarter was.
| Originally posted by michaelk I wonder what the write down would have been if they kept them for internet? ISnt the ocnsensus that they could make even less money with that? |
Quote:
LOL ... yet I'm sure the board and other top brass are still being "well compensated." 
(Just like any other corporation.)
| Originally posted by sregener I can't say too much as a former employee, but I do wonder when the last time DirecTV posted a *profit* for a quarter was. |
(Just like any other corporation.)Quote:
Yup - they have to come up with some way to counteract the $2.6 Billion they got IN NEW REVENUE from the sale of their Sat business division.
All tax-reduction "creative" (but legal) accounting.
They're making tons of money, but sinking it back into "marketing program reserves" and such other future "investments" that may or may not ever be spent. IN the mean time, their customer base is growing at record pace and in about a year, they'll have more bandwidth/capacity for HDTV than anyone, including locals.
| Originally posted by rogo To be clear, the only "new news" is the writedown. The decision was indeed reached and announced weeks ago. This is an accounting / Sarbanes Oxley / etc. thing. |
All tax-reduction "creative" (but legal) accounting.
They're making tons of money, but sinking it back into "marketing program reserves" and such other future "investments" that may or may not ever be spent. IN the mean time, their customer base is growing at record pace and in about a year, they'll have more bandwidth/capacity for HDTV than anyone, including locals.
Does anyone know the stats on the spaceway sats?
-Number of transponders?
-Bandwidth per transponder?
-Broadcast frequency?
-Number of transponders?
-Bandwidth per transponder?
-Broadcast frequency?
"I'm no accountant but i'm curious what they took a write-down for.
Sounds to my layman's ears that they believe the amount of revenue that they generate from the says for HDTV will be less than what they could (or used to think they could) get from selling internet.
is that the basic gist?"
Yes, the value of the satellites was predicated on a certain revenue stream and a predicted useful life. Imagine having, say, 1 million people paying $39 a month for Internet.
Instead, they will likely have 3-5 million people paying $5 per month for local channels (or something like that). A lot less value = an asset that is worth less.
"I wonder what the write down would have been if they kept them for internet? ISnt the ocnsensus that they could make even less money with that?"
Not when they hatched the plan, no. When they decided to give up, obviously yes.
Sounds to my layman's ears that they believe the amount of revenue that they generate from the says for HDTV will be less than what they could (or used to think they could) get from selling internet.
is that the basic gist?"
Yes, the value of the satellites was predicated on a certain revenue stream and a predicted useful life. Imagine having, say, 1 million people paying $39 a month for Internet.
Instead, they will likely have 3-5 million people paying $5 per month for local channels (or something like that). A lot less value = an asset that is worth less.
"I wonder what the write down would have been if they kept them for internet? ISnt the ocnsensus that they could make even less money with that?"
Not when they hatched the plan, no. When they decided to give up, obviously yes.
"Does anyone know the stats on the spaceway sats?
-Number of transponders?
-Bandwidth per transponder?"
Aggregate bandwidth per satellite is 10 gigabits. In theory, enough for 500 HD channels per satellite.
"-Broadcast frequency?"
Ka band. Higher frequency that the existing Ku-band birds used by DirecTV.
A single dish with a new LNB assembly will allow receiving from them.
Mark
-Number of transponders?
-Bandwidth per transponder?"
Aggregate bandwidth per satellite is 10 gigabits. In theory, enough for 500 HD channels per satellite.
"-Broadcast frequency?"
Ka band. Higher frequency that the existing Ku-band birds used by DirecTV.
A single dish with a new LNB assembly will allow receiving from them.
Mark
Of course, rogo, NewsCorp didn't hatch this plan at all.
It was left over from the previous administration(s).
It was left over from the previous administration(s).
I know Fred. And it might even have been a good plan when hatched. Back then, there was a lot of telco indifference around DSL and cable had its own way on broadband. Since then, a couple of important things have occurred:
(1) The ILECs got religion and decided not only does broadband matter, but cheap broadband is the best way to compete with cable.
(2) Rural areas that had absolutely no broadband option have begun to get one via WiFi.
The size of the satellite-based broadband market shrunk dramatically due to those and other factors.
(1) The ILECs got religion and decided not only does broadband matter, but cheap broadband is the best way to compete with cable.
(2) Rural areas that had absolutely no broadband option have begun to get one via WiFi.
The size of the satellite-based broadband market shrunk dramatically due to those and other factors.
Well, this jibes with ExtremeTech's review of the DirecTV HD DVR (Tivo) dated October 26th.
http://www.extremetech.com/article2/...1683851,00.asp
Excerpt:
"That should change, though, because DirecTV just reengineered two satellites from providing internet service to delivering more HD channels. They launch next year."
http://www.extremetech.com/article2/...1683851,00.asp
Excerpt:
"That should change, though, because DirecTV just reengineered two satellites from providing internet service to delivering more HD channels. They launch next year."
1 - 16 of 16 Posts
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