Satellites to Fill the Sky

To enable this explosion of HDTV, both satellite systems will gradually convert their broadcasts to the MPEG-4 digital encoding system, which is more efficient and flexible than the MPEG-2 system used for DVDs and for HDTV broadcasting by ground-based TV stations. Initially, only viewers desiring high-definition programming will need to discard their existing receivers in favor of new MPEG-4 models, but the satellite companies plan to ultimately change over their entire operations, requiring all subscribers to trade up to new receivers. Dish sounded more amenable to allowing users to trade in older models, while DirecTV assumed subscribers would purchase new receivers.

A “Perfect Storm” of Convergence
Dish led off with chairman Charlie Ergen's promise that this fall would see “the perfect storm” in terms of the convergence of technologies to expand and improve satellite programming and broadband Internet service. Dish will begin transmitting local HDTV channels by the end of the year. Much earlier, in February, it will offer video on demand (VOD) interactive programming through its new DVR 625 satellite receiver, which combines “TiVo-like” features with 100 hours of storage. (Ultimately this will be upgraded to 200 hours.) To start users off, Dish will automatically download 30 movies along with popular TV shows (subscribers will be able to select programs themselves for future downloads).

The new DVR 942 HDTV receiver/hard-disk recorder, which can save 25 hours of high-def or 180 hours of standard programming, can simultaneously feed HDTV programming to one TV and a different channel of standard-definition programming to another TV. It can also transmit audio via power-line networking anywhere in the house with an audio client receiver.

Most amazing, however, was Dish Portable DVR, a hard-disk recorder with a built-in 7-, 4-, or 2-inch screen and a 20- or 40-gigabyte hard drive. Using USB2 for transferring data, it can download a movie from a Dish DVR in just 5 minutes. Dish pointed out it's the only portable digital video recorder that will let you watch movies without either DVDs or an Internet connection. It easily connects to a TV for playback with full MPEG-2 resolution. The Portable DVR also stores photos, MP3 audio, and PC video. To foil pirates, there are no digital outputs.

Since satellite services normally bundle hardware with service, Dish announced no prices for these new devices. However, in a hint of how advantageous bundled pricing can be, it did announce a complete satellite HDTV system for $1, 600 that includes a 30-inch LCD TV and a Dish 811 high-def receiver. You also have to subscribe to one of Dish's regular programming packages plus a year of its HD Pak, the price of which has been lowered to $10 a month for new subscribers.

DirecTV Goes Interactive
In the room next door immediately following the Dish Network presentation, DirecTV strutted its stuff. First of all, subscribers in twelve major markets will be able to receive local HDTV channels by the end of this year, and DirecTV promises that within three years it will deliver 1, 500 local channels and 150 national channels in high-definition. DirecTV goes interactive with a new “Active” package that includes three interactive channels, each of which shows six programs at once in one of these categories: news, sports, and kids. Talk about multitasking and short attention spans! Active also provides lottery results, horoscopes, and previews of other DirecTV channels and new programming. To make the most of this service, which comes at no additional charge, DirecTV debuted its latest digital hard-disk recorder, which can store 100 hours of programming and incorporates three tuners, so you can record two different shows while watching a third. A really neat feature is that you can record a pay-per-view program, but only pay for it when you view it — Dish won't bill you if you never get around to watching the movie or event. Like Dish Network, DirecTV gave no price for its new hardware.

Cable Strikes Back
The cable industry remains keenly aware of satellite TV's challenge. Shortly before the official opening of CES, in a hotel far from the Las Vegas Convention Center, Samsung and Time Warner Cable inked a deal to work together on next-generation interactive connections for digital cable based on the "OpenCable" standard developed by Cable Television Laboratories. Current CableCARDs, which let you watch premium cable channels without a set-top box, just a cable plugged directly into the back of the TV, cannot support interactive program guides or video on demand. Version 2 of the standard, which would permit true two-way VOD, isn't completed yet, but Samsung plans to forge ahead anyway. (Current satellite systems require a telephone line to send data back to the user.) At the show, Samsung had a 50-inch DLP rear-projection HDTV with a prototype two-way card slot it called iDCR (interactive digital cable ready).