Verizon introduced a new broadband price-for-life promotion for specific DSL tiers. The promotion runs through February 21st and new customers have to commit to at least a two year term. The promotion guarantees no price hikes for as long as the customer keeps the service. Pricing for the promotion starts at $17.99/month for up to 1 megabits per second (Mbps); up to 3 Mbps at $27.99 per month; and up to 7.1 Mbps at $37.99 per month. Verizon also announced it’s DSL powered 7.1 Mbps service is now available to 9 million homes across their footprint.

Verizon also announced a new promotion for its DirecTV powered triple play bundles, with new introductory pricing of $74.99 (when ordered online) for unlimited voice, 1 Mbps broadband, and DirecTV video service. As Verizon’s press release title suggests, the new promotions are clearly targeting “Budget-Minded Consumers.”

DISH Network reported quarterly results today and they weren’t pretty. For the second quarter in a row, DISH actually lost subscribers – 10K last quarter, compared with 25K in 2Q08. In an environment where most cable and telcoTV providers continue to see growth in digital subs, DISH is the odd man out, and is apparently falling victim to their competitor’s prowess. Factors including a bad economy and DISH’s loss of AT&T as a distribution partner which impacts them long before the formal partnership actually ends in February 2009 played a role. The lack of a true triple play bundle is apparently hurting them more than their main competitor, DirecTV, who added 156K subscribers during the same quarter. What’s more disturbing for DISH is if they can’t gain subscribers at their competitor’s expense given their “value” reputation in tough economic times, when can they? DISH says they’ll have to increase their marketing efforts to turn things around. Will that be enough?

Verizon is putting some attention on non-FiOS triple play bundles by announcing price reductions for their DirecTV/DSL powered triple play bundles. Continuing decreases in DSL and wireline telephony subscriber counts are certainly helping fuel this latest promotion. These latest bundles offer unlimited local and long-distance calling, broadband via DSL at 1, 3 or 7.1 mbps tiers, and DirecTV satellite service. Prices start at $79.99/month, down from $95/month and go as high as $120/month depending on Internet speeds and video channel selection. For example, $99/month buys you “a triple-play package of Verizon High Speed Internet service at up to 3 Mbps, unlimited local and nationwide long-distance voice service with several calling features and DIRECTV's PLUS HD DVR package with more than 200 digital TV channels and DVR service, plus a free DVR upgrade and SHOWTIME premium movie channels for 12 months,” according to a Verizon company statement. Verizon is also promoting double plays of phone and either DSL or DirecTV starting at $49.99/month.

AT&T and DirecTV announced an agreement where AT&T will resell DirecTV services as a part of their “AT&T Advanced TV” video portfolio. The agreement will begin after January 31, 2009, when AT&T’s current agreement with DISH Networks expires. It’s a big, although expected, blow to DISH Networks, who had great success with leveraging their AT&T partnership for subscriber growth. Observers from afar could conclude that AT&T stopped aggressively marketing their DISH bundle in favor of U-verse long ago, which certainly contributed to DISH’s slowing subscriber growth, culminating with an actual decline in subscriber counts in 2Q08.

"Our focus is on providing customers with a better TV experience than cable," said Jeff Weber, AT&T vice president-Video and Entertainment in a company statement. "AT&T | DIRECTV complements our premier AT&T U-verse TV service and gives customers another great choice for state-of-the-art, 100 percent digital programming." DirecTV now has a virtual coup with “bell company” telco partnerships, including agreements with Verizon, Qwest, and AT&T. DISH has current resale agreements with large independents, including EMBARQ, Windstream, and CenturyTel. Now the real question – how long before AT&T buys DirecTV?

DirecTV to Liberty Media. "I was frightened of the triple play in cable and then a superior service coming from the telephone companies,” Murdoch told a Goldman Sachs investor conference on Wednesday. He also suggested that although he may have some regrets over that thinking, since DirecTV seems to be holding up quite well against those triple play competitors, he still believes his assessment will be right over the long term.

The current assessment is right – DirecTV is indeed holding its own against the triple play competitive threat. They have executed a well defined strategy of focusing on content and feature enhancements, including HD, sports, and interactive apps, that position DirecTV as a premium video offering. Premium enough for millions of subscribers to forgo the perceived value of triple play bundles, and make DirecTV their video option of choice. It’s a great lesson in focusing on your core strength and leveraging it to your advantage. As Murdoch suggests, there is no guarantee this current success will translate into long term prosperity for DirecTV. There is no shortage of challenges for them to sustain this success. Beyond the triple play challenge, forthcoming convergence applications provided by IPTV, tru2way, and wireless integration will be tough for DirecTV to compete with.

DirecTV announced that their relationship with TiVo has expanded and they will jointly develop and launch a TiVo powered HD DVR. According to the release, the new HD DVR “…will support the latest TiVo and DIRECTV features and services, including TiVo's Universal Swivel Search and TiVo KidZone. TiVo will develop the new HD DVR for an expected launch in the second half of 2009.” The deal is non-exclusive, and DirecTV will still develop and market its own set top boxes. DirecTV and TiVo began marketing traditional DVRs to the DirecTV customer base back in 2000. The relationship went through a rough patch when DirecTV was controlled by Rupert Murdoch’s News Corp. But since Liberty Media took a controlling interest in DirecTV, the relationship is on better terms.

HD DVRs are increasingly seen as effective competitive weapons. DirecTV competitors, especially on the telcoTV side with AT&T U-verse, have been leveraging HD DVR to their advantage. DirecTV hopes this development will add some muscle to their existing HD DVR options, since TiVo is seen as a pioneer and leading developer of DVR technology. The move could also help DirecTV continue its lead over DISH. DISH is in real DVR trouble because of a legal dispute with TiVo. So far it’s losing that legal battle, and may suffer serious DVR setbacks if the losing trend continues.

Need to know which competitive bar to reach for with video service – look to DirecTV. Their PGA Championship golf tournament coverage is the type of differentiating program package that allows them to compete quite effectively, despite the lack of a triple play bundle. I’ll admit, the sports enthusiast in me is somewhat in awe, nevertheless, the PGA Championship package being offered by DirecTV is just the type of feature that will retain and attract video customers, and probably at the expense of their competitors. Consider the lineup, which includes extensive HD coverage:

• Four distinct channels, including: 1) Live CBS/TNT network coverage of the tournament itself ; 2) Featured Group channel which follows a single group's progress around the course, with announcers providing insight on the live play; 3) Featured Holes channel will focus solely on two of the challenging par 3 holes on the Oakland Hills South Course; 4) Players In Depth channel featuring interviews, highlights, press conferences, graphics and up-to-the-minute stats




• On demand interactive features including: 1) Top 5 Leaders: Displays the top 5 current scores against par; 2) Leaderboard: Provides information on all golfers in the field; 3) Scorecard: Hole-by-hole stats for each player in the field. The current round and any previous rounds are included; 4) PGA Championship Trivia: A new 10-question quiz on the history of the PGA Championship appears each day; 5) Past Champions: A list of the winners and runners-up from previous PGA Championships

It’s a great demonstration of how one competitor can leverage core competencies, in this case video and sports, to effectively compete against all comers. Time will tell if IPTV and cable providers can “catch up” with DirecTV. They very well may. But for the time being, DirecTV is showing leadership and vision and taking full advantage of its capabilities. Give credit where credit is due.

AT&T notified DISH Networks that it will sever their existing resale arrangement at the end of this year. AT&T has been reselling DISH’s video services since 2003 and expanded the relationship further after their Bellsouth acquisition. It’s widely believed that through this move, AT&T is forcing DISH’s hand into a bidding war with DirecTV for a long term resale arrangement with them. AT&T will need a DBS resale partner, just like every major telco in the U.S. currently has. Despite all the hype surrounding U-Verse, AT&T will need a DBS partner to field a competitive triple play bundle for years to come. Even after the current billions of dollars that are committed to U-Verse have been spent, it will still only reach a large minority of AT&T customers. The mid to long term strategy for AT&T and other telcos is to use DBS to fill the gaps. Of course, AT&T may have something else up its sleeve as well – a possible acquisition of DirecTV. Is this DISH development a pre-emptive merger move, with DirecTV being the acquisition prize?

DirecTV announced the availability of its video-on-demand service on a nationwide basis. DirecTV’s VOD solution utilizes content delivery over broadband networks, as well as “pushes” content to compatible DVRs via satellite. Customers are required to have a DirecTV Plus HD DVR or R22 DVR receiver, as well as subscribe to broadband. DirecTV says the service offers more than 4,000 standard-definition and HD titles. The service has been in limited trials before the nationwide launch.

Chase Carey, CEO of DirecTV, says that they've felt the competitive impact (certainly not as much as DISH Networks) from telcos and their video offerings. But he's not too worried, because those gains, by his estimation, are unsustainable. Carey asserts that the discounts and promotions offered by telcos to grab video market share can't be continued, and that consumers are getting savvier about triple play bundles and the promotional pricing tied to them. There's certainly some truth to that, but its funny hearing it from a DBS industry that historically had very high (maybe the highest) subscriber acquisition costs when they were in the thick of taking market share from the cable industry. Maybe it's too early to tell, but it appears that strategy worked for them, since they now collectively have roughly one third of the video subscription market. Why then, can't telcoTV players follow suit? Carey offered his comments at a Lehman Brothers Wireless and Wireline Conference in New York City on Thursday. Carey said he's quite comfortable with DirecTV's position relative to its competitors. He says DirecTV is faring quite well and their successful HD market lead is paying dividends.