DirecTV CEO Scoffs At Competition From Apple TV

theodp writes "In a move that evokes memories of Steve Ballmer's initial pooh-poohing of the iPhone threat, DirecTV Chairman Michael White downplayed the Apple TV hype, expressing doubts that 'Apple's interface will be so much better than DirecTVs' that people will be willing to pay for an extra box. So, will White's statement — 'It's hard to see (it) obsoleting our technology' — come back to haunt him?"

Comments

Irony alert!

[King_TJ]

While DirecTV's Chairman is crowing about his viewers lacking an interest in paying for an "extra box" on top of what he provides? Viewers will continue to drop DirecTV service completely, once they use boxes like AppleTV and realize they're saving a lot of money by streaming video content and doing "pay only for what you want to watch" with iTunes store movie or TV series purchases/rentals. So yeah, he's right... They only want one set-top box. Increasingly, it won't be his.

Re:Irony alert!

[__aaltlg1547]

But I consider the per-view charges of AppleTV very expensive. They're OK for movies, but for weekly television episodes, they're higher than I'm willing to pay.

Re:Irony alert!

[rockout]

If you only watch 2 or 3 TV shows regularly, is it more expensive than a DirecTV package?

Re:Irony alert!

[Sponge Bath]

I use my Apple TV mainly for playing music off my main iTunes library, but I looked at the video and saw $2.99 per episode for TV shows? I have Amazon Prime streaming and see similar stuff: $1.99/episode for a 4 year old How It's Made.

Everyone is talking about the merits of different technology, but the real road block to adoption seems to be an insanely broken pricing scheme. I saw that Dish pays around 0.25/month per subscriber to Comedy Central. Yet somehow it's reasonable to ask 2 bucks for a single episode of a single show from that channel?

Re:Irony alert!

[SomePgmr]

I worked the math on this for my usage not so long ago. I could do Netflix, Hulu, Amazon Prime and pay to watch something like 2 regular shows assuming one show per week, and it was still less than I was paying for TV. The exercise was to see what I could get legally for what TV costs... no torrents.

That was with AT&T though, and when I asked about cancelling my TV service they were quick to remind me that my internet service would get more expensive. And now they're capping usage. Those folks know what they're doing.

Re:Irony alert!

[gstrickler]

I saw that Dish pays around 0.25/month per subscriber to Comedy Central. Yet somehow it's reasonable to ask 2 bucks for a single episode of a single show from that channel?

Multiply that by the number of subscribers (not actual views) and you'll find that CC is getting a hefty check. Even people who never watch CC are paying that monthly fee. Compare that to the actual revenue from episodes sold (and "sold" is a 1 time payment, not monthly or per view), and I think you'll find it makes sense. Also, episodes "sold" generally don't include commercials, so they're giving up that revenue stream too. Completely different business models.

Rental is yet another business model, one that's closer to the cable/satellite model.

Cable/satellite = all you can consume, but only as long as you maintain your subscription. When your subscription ends, all access ends with it. Pay the same whether you watch 1min or 500hrs per month.
Per show rental = Pay per view (or a window of xx hours). Access ends after xx hours (or one view).
Per show purchase = Pay more per show, but pay only once, and watch it whenever you choose, as many times as you choose.

Either way, the content creators and/or distributors will want to make ~ the same amount of revenue. So, you will pay more up-front for a purchase, but you don't have the recurring fees.

Re:Irony alert!

[rockout]

It makes sense from their perspective, in a weird "let's-not-give-customers-what-they-want" kind of way. If they provide you with enough of a disincentive to drop their TV service while you keep internet, they feel like they're (at least temporarily) delaying the inevitable march that consumers are making towards the pay-for-what-you-want-to-watch model of content delivered across the net. It's short-sighted, but then again, when's the last time media companies adopted a smart long-term strategy?

Re:Irony alert!

[Xrikcus]

I tried to drop comcast TV last year and they told me it was cheaper to have internet + basic cable than internet alone. Of course it was... until 6 months later that specially discounted package ran out and my bill jumped. You have to keep an eye on it.

Re:Irony alert!

[RKBA]

Yes, that was what happened to me. My package discount ended and Comcast raised my monthly charge. I called and told them it was too expensive and that I had to cancel something or cut back on services, and asked how much I would save by cancelling television service from my "Triple Play" package. They transferred me to some sort of "Customer Downgrade Department" (Yes, Comcast actually said they have a department called something like that, although I'm not sure of the exact name). The "Customer Downgrade Department" person was the one who told me that Comcast had reinstated my package discount (and I hadn't even asked them to do it, hooray!), and because of that it would cost me more each month without TV included in the package than with it, so overall the end result was that the telephone call did save me some money even if their policies do seem insane.

Re:Irony alert!

[sir-gold]

When the original Boston tea party happened (1773), there weren't armed guards and locked doors protecting the cargo, and there weren't security cameras recording everything with the police only a phone call away.

Damaging Telecom property (as much as I would love to) is probably an considered an act of terrorism, at which point you don't even get due process, you just "disappear" to gitmo

"Extra box"?

[danaris]

Given all the rumours, it sounds more and more likely that Apple will be releasing an actual TV set of one sort or another. That wouldn't be an "extra box," it would just be a replacement TV.

I wonder what Mr. White would think of the chances of that sort of "Apple TV"?

Dan Aris

RIM

[codepunk]

RIM thought the very same thing until Apple handed them their ass.

I'm the one he's not worried about.

[__aazsst3756]

At one time hooked to our TV was a DirecTV box only. Today we have (in order of usage):

- Apple TV. This is what the kids hit first when looking for something to watch. Mostly Netflix cartoons, our Vimeo home videos, and our Photo Stream. We have never purchased or rented a program from Apple!

- XBox with Kinect for a gaming fix.

- Old re-purposed Dell. This is full of all the DVD's I did not want my kids destroying (locked safely away, and yes we do own them), and a way to access anything on the net the first two don't.

- A real antenna. Sports look horrible on my friends HDTV with all the compression! (needs fed through the computer... someday).

I would be OK with just the first two if Apple would open the interface up for more content. I would happily pay a small ($1-5) monthly fee for channels such as Discovery, Science, etc. I'm guessing this will only happen once these channels are replaced by new content producers that are 'net only.

Re:Kind of reminds me of

[paiute]

The "PC" guys figured out that the best phone wasn't a complex phone but a small screen computer. Maybe they are also figuring that the best TV isn't a complex TV but a big screen computer.

haunt him? no

[optimism]

So, will White's statement — 'It's hard to see (it) obsoleting our technology' — come back to haunt him?

Short answer: No.

The CEO of DirecTV obviously has better intel about the TV/video distribution market, than any slashdotter posting here.

Is AppleTV a threat to them? I don't know, and it really doesn't matter. For the sake of argument, let's pretend that AppleTV is a huge threat, and that DirecTV is doomed, and one man, even the CEO, cannot effect the sweeping market changes to reverse this course.

White's motivation, as with any CEO of a publicly-traded company in the Wall St system, is to maximize his income. He does that by keeping the stock price as high as possible, for as long as possible, even in the face of a known inevitable demise. Then when profitability is clearly compromised, he can collect large compensation for sticking with a "troubled company". Or just jump immediately to the next company. Rinse, repeat, retire.

This is the way the current system works. The CEO is not an "idiot" for not publicly recognizing threats that he/she absolutely knows about. Quite the contrary. His behavior is "smart". It's the overall rules of the system that are "dumb".

Re:haunt him? no

[Anubis IV]

I think you're missing the obvious: poor insight on their part can sink their careers. Rather than comparing what he's saying to Ballmer, I find it more apt to compare it to something said by Ed Colligan, the former CEO of Palm, about two months prior to the iPhone's announcement:

We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.

After being ousted as Palm's president and CEO, he ended up with the investment group that had sunk money into Palm. That didn't go too well, last I checked, and I haven't found any evidence of him being an executive anywhere else. His failure to recognize the threat to his business, despite having better info than the usual slashdotter, wasn't merely a public facade. His career has never been the same, and that's why his quote has doubtless come back to haunt him. The same may be true here if DirectTV's CEO is in denial of a credible threat. Putting on a strong public face is fine, so long as behind the scenes he's actually working on something to counter the threat.

That said, you are absolutely correct that until we see what's announced, we have no way of knowing if it's an actual threat or not. As such, the smart thing for him to have said would have been, "We don't comment on hypothetical products." Anything more than that and he's setting himself up, in the case of Apple entering the market and succeeding, to be derided as someone who was caught with their pants down and their head in the sand. That's not an image that makes for healthy careers.

Well lets see

[Cute Fuzzy Bunny]

...I've been a directv subscriber since around 1994 when they had 50,000 customers and have their current HD DVR technology.

Pro's: nice picture quality, lots of channels, plenty of downloadable shows.

Cons: Cant stream anything except youtube from a search. No netflix. No hulu. Have to download all shows which can take quite a while and can only start viewing when you have buffered a lot. Most hardware platforms are slower than molasses going uphill on a cold monday morning, and if your brand new HR24 craps out, chances are they'll ship you a replacement HR 20/21/22 that are basically too slow to use. You hit a button on the remote and a while later something happens. Completely opposed to and unsupporting of anything coming through the box that isn't directv supplied and branded.

In short, unacceptable for 2012, poised for a major faceplant from someone elses set top box. Obstructionism and protectionism only work until someone has something as good for less money that works better. I don't think thats Apple TV because I can't see anyone seriously spending a couple of bucks per tv show. Netflix and hulu are incomplete. But as soon as someone puts out a streaming package with full sports, all local broadcast and pretty much everything I can get from directv minus the big dish and tons of wires and little boxes for under $100...directv will start hemorrhaging money and subscribers.

Having had the chance to speak to a number of directv senior and middle management, they consider the customer a barely necessary evil and have absolutely no idea as to how to treat customers. When you're the best show in town, you can get away with that.

Re:Talking to your Apple TV

[ColdWetDog]

I could be wrong, but laying on a couch and talking to your TV for hours on end has the potential to be a soul-deadening experience.

As if laying on your couch and simply watching your TV is the pinnacle of Western Civilization?

ZOMG! Rly?

[Lumpy]

If Michael White is that stupid then it explains a lot. The Direct TV UI is completely horrid in every way. The guide sucks the menus suck, the remote sucks. It's better than the garbage that Comcast has, but only marginally. All of the Cable or Satellite providers have the crappiest UI possible on their boxes. Because they refuse to spend any money on them so they have the box engineers simply slap one together for the least possible cost.

Apple is going to wipe the floor with them. If apple finds a way to have a $45.00 a month subscription to most of the desired channels out there but in a On demand form, They will utterly destroy Dish and the others.

Re:AppleTV may have to deal with ISP and data cost

[blahbooboo]

What this is fucking free ride you are mumbling about? I paid for my pipe, and though it may be shared with my neighbors, it's none of your fucking business where I suck down my content from.

You are an idiot.

You had a nice rebuttal. The name calling was unnecessary and makes you look like the idiot. Try and just stick to your argument, youll get much farther in life...

Need a new phrase

[ilsaloving]

Something like, "If Apple focuses on your market, you better focus too". Apple has an unequivocal track record of being a major disruptive influence on any consumer market they choose to enter. Music players. Music industries. Phones. They may not dominate any given market, but they sure as hell disrupt it.

I have to say that I'm actually glad for this. All these markets have essentially been static and stagnant with the incumbents doing the same crap without any real innovation. Then Apple waltzes in and suddenly everything gets really interesting. The phone arena is particularly interesting, because we get to watch the relatively long-lived incumbents (eg RIM, Nokia) thrash, crash and burn in slow motion while everyone looks on and says to themselves, "Wow, I can't believe we put up with the crap they've been peddling for so long!"

Very few holes now

[SuperKendall]

iTunes is fine if it has what you watch.

As far as TV goes, there is very little you cannot get between iTunes and Netflix.

Even HBO is present, though on substantial delay (1 year wait for game of thrones on iTunes).

But if you are simply wiling to wait a while for TV shows there is almost no gap. And even for current stuff if you throw in Hulu you'd probably only be missing HBO.

So basically, all Apple has to do is bribe HBO, and get Hulu working with Apple TV to give users a box that should make DirectTV worry... that and support either OTA HD or some other way to get live sports (the real gap at the moment between the hell of cable/satellite TV boxes and freedom).