The Critical 'I'

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Friday, December 26, 2003

DVR: THE MURDOCH FACTOR, PART II
use the force, mate
As a follow-up to speculation regarding Rupert Murdoch's acquisition of DirecTV and how it could catapault News Corp. into an even bigger industry role, Chase Carey, President/CEO of Hughes Electronics Corp. (operator of DirecTV) revealed several upcoming initiatives designed to make that speculation reality.

In particular, as I suspected, the digital video recorder, or DVR (or, as it's referred to in this Reuters article, PVR for personal video recorder) is going to be the prime driving force for News Corp.:

"I think PVRs are going to be a critical component of the television experience," Carey said.

As the biggest consumer of PVRs, Carey said he expected News Corp. to use its scale to drive down the cost of devices, and that DirecTV would role out initiatives next year to take advantage of the devices.

He said DirecTV would send customized sports highlights, weather and news programming to be uploaded continuously to the PVR.

Next year, he said, the company would offer a PVR capable of recording high-definition television.

"We want to be the leader in providing PVRs," Carey said. "Today the universe is under 1 million for PVRs, but I think that's going to grow quite rapidly."

This pretty much confirms the fears expressed by the rest of the industry earlier this month. In particular, the bit about the customized sports, weather and news content going directly to the DVRs is probably the biggest concern for other media outlets:

Other programmer fears, discussed in more private settings, were that Mr. Murdoch would pack DirecTV with exclusive Fox content and use the DBS menu to give prime channel placement to his own stations.

Finally, back to the Reuters article: As I expected, these moves put Tivo behind the 8-ball:

News Corp.'s focus on the PVR would seem to bode well for TiVo Inc., DirecTV's longtime supplier of the devices, but Carey made it clear DirecTV would look beyond TiVo in order to get the best prices.

"They have many more capabilities than anyone else in the marketplace but its important to make sure we fully develop all avenues to bring PVRs to DirecTV customers," Carey said.

Carey's comments here are pretty much a warning shot over Tivo's bow. He's saying that they're not married to DirecTV's previous deal, and unless Tivo comes down in their licensing fees, News Corp. will find another dance partner. In fact, I think the inclination is to go with a more bare-bones DVR service. If News Corp. is planning to ram all it's own conent onto the DVR programming grid, it really doesn't need anything that Tivo offers in this area; and the basic DVR technology (hard drive, recording manipulation, etc.) is widespread enough that there are plenty of other providers in that area.