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GM to choose the winner for DirecTV by tomorrow

1188 Views 14 Replies 11 Participants Last post by  MikeSRC
GM to make a decision by tomorrow Oct 27th.

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Basically what is of interest in the article is that News Corp has forced GM into a decision this weekend by telling GM that if it does not decide between E* and NewsCorp that News Corp will withdrawl it's offer.

From the stockholders point of view it seems that the better deal is with E* but analysis like this is not my field so I'll defer to those who consider themselves expert in this area. I see 22 billion from News Corp or 28 billion from E*

E* wants the deal and there are two stumbling blocks, getting a $5.5 B. line of credit for the cash part of the deal and convincing the regulators (federal govt.) that it will not be an anti trust problem.

From a viewer point of view, I would like to see News Corp get it as it offers us a variety of programming choices and sub packages we viewers may not have in the future with one company, E*, as well as the fear of change of hardware that few if any of us understand how that will all evolve and affect our investments.
From a viewer point of view, I would like to see News Corp get it as it offers us a variety of programming choices and sub packages we viewers may not have in the future with one company, E*, as well as the fear of change of hardware that few if any of us understand how that will all evolve and affect our investments.
I would agree with you Don IF News Corp does NOT abandon HDTV on DirectTV. We all know what Rupert Murdoch's attitude is towards HDTV--he's a short sighted maximize-profits-now man who has NO use for it, which means he might very well completely mess up current and future HDTV efforts.

E*, on the other hand, might very well use the extra satellite capacity to give us more HDTV. The major potential problem is that DirectTV subscribers might have to get new hardware.
One man's opinion:

If E* buys Dtv then competition in the market is lost. If the market doesn't want HDTV then we're screwed in the long run anyway (I'd say the jury is still out on that). If the market DOES want HDTV, then competition gives choices and choices are better. No competition is bad, just look at M$.

If E* buys Dtv, they have already stated that Dtv hardware would be obsoleted. I have Dtv hardware. I think that is bad. I will NOT buy E* hardware just to keep HDNET. Are you listening Mark?

So I hope News Corp. gets it.

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If equipment was obsoleted, where does that put me with my $3500 RCA 38" TV? For that matter, would all of us with HD hardware be offered base Echostar receivers as replacements?

I can't think the consumer electronics partners (RCA, Sony, Microsoft, Philips, Mitsubishi, Panasonic, etc) would be too happy about losing their product lines under an Echostar replacement plan. They must have some long term contracts in place that would need to be honored by Echostar if a buyout were to take place.

For this reason, I think Echostar would simply stop any expansion plans for the DirecTV viewers, including locals and HD, and use the allocation of the satellite locations to support Echostar expansion of locals. What we would end up with would be ATT Broadband in the sky. No interest in improving quality (no additional HD), only quantity (more SD locals), with the DirecTV hardware owners in limbo.

That would suck. News Corp would at least keep the competition alive.

P.S. What's going to happen with the satellite locals in several years when the locals stop providing analog material. Will Echostar and DirecTV downconvert the HD locals to SD to fit within their bandwidth? Surely they won't drop existing SD channels. All of a sudden, the satellite plan to provide locals doesn't look like such a good idea. It gets more subscribers, but sacrifices quality for quantity.
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As other's have noted, E* + DTV does not imply loss of competition--if anything, it *enhances* the competitive threat to cable, which just might make them get off their collective fat butts and do something. Satellite is simply one way of getting a signal--if I'm not mistaken, E* + DTV represents only 10% of households, OTA 5% and cable 85%. Cable is the monopoly here, guys, and no one is unduly hendering their consilidation.

That said, there are amazing economies of scale for the E* + DTV combo--that can't hurt the more HDTV fight, even if it means some equipment swaps (DTV did it with that smaller satelline op they bought some time back). Murdoch's aims are pretty obvious, and I think I'd rather have the *chance* for 20 new HDTV slots (even if it's just time-shifted stuff) than 200+ new Home Shopping Network channels.

E* can get the $5.5B--their deal is better for GM (more cash, which is what GM wants and needs right now to bolster the bottom line). The threat of FCC action against E* + DTV is a red herring (E* only has to re-use the 1956 du Pont cellophane argument to nullify the numbskulls at the FCC), but a politically charged one, so logic may take a back seat.

Plus, I think Murdoch is a yutz. :)
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I think differently on the satellite's locals plan...I think it actually works to their benefit in the long run.

I think the long-term satellite local retransimission plan is self-obsoleting. Once all the locals have shifted to DTV transmission (it will happen, just may take a bit longer than expected) satellites can drop the retransmission and free up satellite capacity for other channels or other uses. The only reason E* and DTV are forced into retransmitting locals now is that there isn't an "easy" way for consumers to get decent OTA reception under analog without resorting to cable, which kind of obviates the need for satellite. Of course, consumers will need a new box, but we'll always need a new box for something--E* is toying with the you-don't-pay-for-the-box idea right now, so they may eat such a cost and cover it in higher monthlies.

In other words, in an analog world, for me to get my locals and all the stuff E*/DTV have to offer, I need to also pay for cable (ripoff!) or pray to the analog OTA gods for semi-decent reception (which doesn't happen for 99% of the population). Switch to the digital OTA world in the near future, though, and with my E* or DTV HDTV box, I pick up my locals through the box (and lets just hope they get the recpetion/antena issue ironed out by then), so no need for the locals retransmission. Poof, lots of satellite capacity gets freed up, hopefully to cover all the cool HDTV feeds out there.

As for the equipment changeover, E* (via Charlie) has gone on record that they want to transmission all DTV equipment to E* equipment (for one, the hacker community and compromised cards doesn't really exist in the E* world due). How that happens, who knows--people like yourself with embedded units would be tricky, to say the least. Still, DTV managed to absorb another satellite firm with different hardware with little grumbling, so it can happen. Not everyone will be 100% pleased, but we early adopters sometimes pay the price for progress.
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If E* were to acquire D*, forcing 10 million receiver changeovers would not take place. The changeover would take place over time as new services, repairs, moving, upgrades or whatever unfold. What is the average life of a receiver? We all know technology changes too fast to get upset about this. I was the first on my block to get the 6000 a year ago, people are already wondering when a replacement will be unveiled.

Regarding competition, isn't cable competition? My area had multiple companies until Cablevision took them over. It was frustrating for quite a few years but they now offer quality product and service. So in my case I would have the mother of satellite companies vs the mother of cable companies. Sounds like competition to me.
Ok, so it's Saturday. Who did they pick?

Echostar and DirecTV rushed to add locals because Joe Sixpack (is that moniker still used?) was too lazy to put up an antenna. Joe believed the propaganda from the cable companies that said it was hard. That attitude won't be any different for DTV. In fact, Joe will be really ticked about dropouts. They are much more noticable than ghosts. The need for a decent antenna is (and will be for some time) greater for DTV than analog.

I think the cable companies are much more likely to add HD locals because they have the bandwidth. They only have to add 5-6 channels, not 6 for each of the the 30 or more markets they carry. This gives the cable companies an even greater advantage for DTV. Too bad they won't carry non-network HD channels.

Echostar's response to Joe will be "the Feds ordered the analog signals shut down, but we still provide your locals along with 150 other channels for $35 bucks a month, with no expensive DTV box to buy." Too bad the locals will be SD, but Joe doesn't care.

That's the future as I see it, if we have only one satellite provider.

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I would argue that it's not laziness that led a small portion of J6Ps to E* and DTV for locals, but one stop shopping and the limitations of analog OTA.

I have lived at times 20 miles and 45 miles from my local analog/digital transmitters, and it takes a 6 ft Yagi in the attic to even begin to capture the analog transmissions (and they still have freakin ghosts!), but only a $10 RS bowtie to capture the digital transmissions on my DTC100, clear as a bell, save for the 1-2 drops an hour (averaging 3-5 seconds). The drops and recoveries will improve with 2nd/3rd generation receivers.

J6P, I think, wants a simple, one stop solution for TV enjoyment--and E* (or DTV or E* + DTV) piping down everything but the locals, coupled with the locals pulled in via digital OTA on a box supplied by the satellite provder, equals one box, one solution, one bill. For cable to put even one digital channel on the line requires a huge infrastructure overhaul, which few have (or likely will, without some major external force) done. I think cable is in danger of losing out to satellite in the DTV race. That's just my opinion--I think a satellite provider (with sufficient economies of scale, a la E* + DTV), coupled with the mandated move from analog to digital OTA (SDTV or HDTV, take your pick), has the upper hand in picking up viewers. Cable is the Goliath, satellite is the David, and digital OTA is the stone to do the deed. My view of reality has the satellite providers praying for a speedy local digital OTA rollout countrywide--it frees up bandwidth, reduces complexity, lets them offer locals to J6P for "free" (it's reduced to just a hardware thing) and lets them continue to offer more programming than most any cable provider could dream of.

That said, we're getting lost in our own weeds here--the point at hand is who "best" to take over DTV. It will be a takeover, mind you--DTV will either be Murdoch'ed or assimilated into E*. I just posit that E* is better for me/us (the HT nuts of the world), since such a combined entity would pose a greater threat to cable (see above, assuming you buy into that logic), which would force cable to deploy their broadband infrastructure faster, which would finally enable cable to broadcast HDTV over their wires, which would force E* + DTV to counter with better offerings, hopefully pinned on more HDTV.

Could be spurious logic, but I contend E* + DTV, despite the hardware issues to be faced, is better for competition, since it threatens cable. To me, Murdoch + DTV is just a path to leave cable in control...we have two satellite providers trying to kill each other (the customer acquisition costs are artifically high, since it's not just convincing J6P to go to satellite, but rather which brand of satellite), with cable quietly maintaining is strangehold on the viewing public. That to me means less likelihood of more HDTV.
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Apparently they've adjourned for the day with no desicion. Reconvene tomorrow.

I don't really believe Rupert. I think he's just trying to force a decision. Even if Echostar wins, ol' Rupert will stir up his boys in Washington enough to probably delay the approval, and any subsequent changes to DirecTV, for six months to a year.
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