Filed under: Launches, Consumer experience, Competitive strategy, Verizon Communications (VZ)
So far, big satellite TV company DirecTV (NYSE: DTV) has been able to offer hundreds of channels and high definition, but it has not had “on demand” options. Cable and fiber-based telecom TV products do have the service and that gives them an edge with consumers.
DirecTV has set out to remedy that problem. According to The Wall Street Journal, “The No. 1 satellite-TV provider by subscribers is testing its own version of an on-demand movies and television service that it plans to launch in the second quarter.” The programming will be sent to consumers set-top boxes and be stored there for later selection. While the system is not ideal because disk space limits what the box can hold, it is better than no “on demand” at all. Movies not in storage can be streamed from DirecTV over the internet to the box.
The news is certainly not good for telecom and cable companies. The market for “on demand” is getting very crowded. Cable “owned” the home TV system until companies, especially Verizon (NYSE: VZ) built fiber systems to carry programming into the home. That made two sets of competitors trying to get the consumer to use their products. Now there will be a third.
Three well-funded competitors trying to get market share usually leads to a price war. Getting “on demand” TV services is probably about to get much cheaper.
Douglas A. McIntyre is an editor at 247wallst.com.
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