Today in the United States there are two dominant satellite TV providers – Dish Network and DIRECTV. While the growth of satellite television services has been incredible over the past 20 years, every new technology has a saturation point. Are satellite TV companies beginning to suffer as the market matures? What factors should you consider if you are considering signing up with one of the satellite companies?  What should you know if you are going to compare satellite TV providers?

While both DIRECTV and Dish Network use similar technology, they certainly run their businesses differently. Dish Network continues to focus on price, with the lowest package costs overall. Most advertisements from Dish Network hit on their America’s Top 120 offer, which you can get for an entry level price point of $24.99 a month for one year. Of course this is a bare bones offering, with just a basic receiver. As soon as you add DVR service or need multiple boxes you will be paying more, not to mention this offer is discounted by $15 a month. A more realistic price for Dish Network’s service is probably between $50 and $60 a month once you factor in everything else.

Dish Network continues to be the provider willing to stand up and fight content providers tooth and nail. This probably comes from the fact that their founder and CEO Charlie Ergen is always willing to fight for a good deal when it comes to buying content for Dish Network. While some may call him “cheap” he won’t sign off on contracts he considers unfair. This is probably why some baseball related content like the YES Network, MLB Extra Innings, and the MLB Channel are not yet carried by this satellite television provider.

The other satellite provider, DIRECTV, focuses on the sports fan in much of their marketing. They continue to be the home of the NFL Sunday Ticket, which brings in millions of hard core football fans every season. While this package is a loss leader, costing DIRECTV around a billion dollars a year, it does a great job in insuring football fans both sign up and stay with DIRECTV year after year. DIRECTV is also the home of the NASCAR Hotpass package as well as the Mega March Madness bundle offered each spring. While your DIRECTV package price is probably going to cost you a bit more than a comparable Dish Network package, you will find all of your sports content here.

Both satellite TV providers have had to adopt to added competition in the market over the past few years.  This has come in the form of telecom companies beginning to offer their own cable TV packages. Verizon has rolled out FiOS to millions of customers, and the same is true of AT&T and their U-verse packages. These companies also have the advantage of being able to offer triple play bundles which make it easy for the customer to get high speed internet access and digital home phone services through one provider. How have satellite TV companies adapted to this challenge?

DIRECTV has adopted a “keep your enemies” close policy, by signing resale agreements with both AT&T and Verizon. If the technology is not available to the customer for either FiOS or U-verse, they can bundle DIRECTV service along with their home phone and high speed internet. DIRECTV also partners with Qwest in the Western United States, but has more success there as Qwest does not offer their own video product.

Dish Network currently navigates the pay television market on their own, relying on low prices and heavy advertising to battle the competition. Both companies have relied on their HD content offerings to bring in millions of customers.   Will the two big satellite TV providers merge at some point? It has been rumored that Dish and DIRECTV will get together at some point, but regulators in the United States government would have a hard time swallowing a deal like this. Many rural areas do not have any other choice when it comes to their pay television provider, so competition between Dish Network and DIRECTV remains a good thing for these individuals.

Speculation once began swirling about a possible DISH Network-DIRECTV merger last week, this time due to a report in the Wall Street Journal.

According to the Journal, DISH Network CEO Charlie Ergen stated that he is interested in restarting merger talks with competitor DIRECTV. Coincidentally, or maybe not, DISH Network’s stock had been hammered the day before due to a lackluster earnings report. The stock bounced back after the report, and is now hovering around the $30 mark, nearly the same price as before the report.

DIRECTV for its part, has basically laughed at the proposition. DIRECTV CEO Chase Carey was candid in comments recently, “In terms of the merger with EchoStar, we really have nothing new to say, I don’t know whether The Journal needed to fill a page or what, but I have nothing. There’s really nothing.”

Better than most corporate double speak, and fairly close to a straight up denial. Liberty Media chairman John Malone, the parent of DIRECTV also shrugged off speculation, blaming the regulatory environment. Malone said the deal would certainly be “synergistic” if it were doable, but doesn’t feel much has changed since the last time DISH Network and DIRECTV tried to merge in 2002. Synergistic being the corporate code word for saving lots of money by laying off thousands of employees by combining the companies. That deal fell through when both the FCC and the Justice Department ruled the deal anti-competitive.

While some have speculated that a possible satellite TV merger may be possible now due to the recent marriage of XM Radio and Sirius, its more of an apples and oranges comparison.

Satellite radio is a niche market, with less than 10% penetration as far as subscribers in the United States. Pay television has a much higher penetration rate, between 75 and 85 percent of all households have some sort of cable, satellite or telco TV service. For most in rural America, satellite TV is the only choice. Any combination of DIRECTV and DISH Network would create a monopoly across a huge segment of the population. This would subject the combined company to a huge amount of governmental regulation, as least in the rural areas they serve.

So while DISH Network may be begging for a buyout or merger, they would be better off looking to AT&T in hopes of striking any sort of deal, as nothing will be happening soon with DIRECTV.

The satellite TV battle between DISH Network and Direct TV was stepped up another notch today, as DISH Network said they will have 150 HD channels by year-end 2008.

DISH Network seems to be in an all-out attack on the HD front.  While this is certainly good for consumers craving more HD content, it seems DISH has started to really stretch the truth to put it mildly in their attempt to outdo Direct TV.  More on that later.

First the news on DISH Network’s latest expansion.  After previously promising 17 additional HD channels in Mid-July, which will be added August 1^st, DISH Network today announced they would be expanding to 150 national HD channels by year-end.

DISH Network recently enjoyed a successful satellite launch, as the Echostar 11 will soon become operational and will allow DISH Network to expand its HD offerings.

The latest announcement comes on the heels of the Direct TV announcement that they will expand to 130 HD channels in mid-August.  That proclamation, along with their statement that they will soon have capacity for 150 HD channels took the shine of DISH Network’s 100 channel announcement.

DISH Network initially took the lead in HD programming in late 2006 and into 2007, but dropped the ball after that.  Direct TV expanded their HD content through the end of 2007, leaving DISH far behind.  Charlie Ergen, DISH Network CEO admitted as much on conference calls with Wall Street analysts, praising DirecTV for their execution in the HD market.  After about a year of extremely low subscriber growth, DISH Network is fighting back hard.

DirecTV has pushed both cable companies and DISH Network around in the HD marketplace.  But with DISH Network’s recent announcement of their Turbo HD packages, and their expansion of HD service, it looks like they have finally decided to follow the same path as DirecTV.  Rather than position their offerings as a value oriented television provider, DISH Network is moving toward the position as a premium provider.

The strategy has worked well for Direct TV.  Under the leadership of CEO Chase Carey, Direct TV has reduced customer churn and improved revenue per subscriber numbers, all while the US economy has entered a soft spot.  The latest foray by DISH Network shows they intend to start down the same path.

In conjunction with their Turbo HD packages, DISH Network is also extensively promoting its move to deploy HD content in the highest resolution possible.  DISH claims that via a new “proprietary system upgrade” set-top HD DVR devices will now display content in higher resolution.  Customers with MPEG-4 HD DVR receivers will be able to display HD content in 1080p, the highest resolution possible for 1080p compatible HDTV sets.  Sounds like a lot of technical mumbo jumbo, we will have to wait to see how it looks to see if what DISH Network is promising makes any real difference.

Earlier I mentioned how DISH Network is really starting to stretch the truth (fib or lie anyone?) is being promoted in this press release.  Their latest, recapping all of their HD moves, says they now have 114 national HD channels.  Their previous release announced they would have 100 HD channels.  Where did the 14 additional channels come from?

According to tvpredictions.com, DISH Network is now claiming their video-on-demand channels available in HD as channels.  Fairly ridiculous and creeping up on the fibbing scale close to Comcast’s claim earlier this year that they are the leader in HD because they will have “1000 HD Choices.”

With DISH Network recently announcing they will add 17 new HD channels on August 1^st, the question now is, will they beat DIRECTV to the “magical” 100 HD channel mark?

If DIRECTV stands pat until the end of the month, then that will be the case. DIRECTV made a big deal in 2007 that they would have 100 HD channels by the end of the year. They came up a bit short, ending up at 92. So far in 2008, they have only added three more national HD channels, so they now stand at 95.

If DISH Network does reach 100 first, it would be a quite a reversal of fortune on the HD battlefield. Both companies often fudge their HD channel counts by including pay-per-view channels as well as regional sports networks that are not always available nationwide. Yet 100 is still 100, and would do wonders for DISH Network’s reputation publicly. CEO Charlie Ergen has admitted during investor conference calls that DIRECTV has executed while DISH Network fell behind in late 2007 and on into 2008.

In case you missed the DISH Network announcement, here are the new HD channels that will be added on the 1^st of August:

ActionMax HD

CBS College Sports HD

Lifetime HD

Lifetime Movie Network HD

Planet Green HD

Encore HD

HBO 2 HD

HBO Comedy HD

HBO Family HD

HBO Latino HD

HBO Signature HD

HBO West HD

HBO Zone HD

Starz Comedy HD

Starz Edge HD

Starz Kids & Family HD

Starz West HD

Again this list won’t bring much if anything to the DISH Network subscriber who doesn’t subscribe to the movie packages where all of these HD channels are being added.

Speculation is that DIRECTV is out of capacity as far as adding any more HD until their recently launched satellite DIRECTV 11 is operational in September. The only question now is whether DIRECTV will do something, anything to get 5 more HD channels added to their lineup before DISH Network adds theirs on August 1^st.

The ever elusive DTVPal is now for sale, according to a press release from DISH Network. The release, issued yesterday mentions that the DTVPal is now available through DISH Network directly, but is not apparently in stores yet.

Pricing on the DTVPal is $59.99, so with a government issued $40 discount coupon, the price would be $19.99 plus shipping. A quick check on the DTVPal website had shipping costs at $8.95, so buyers of the DTVPal would be looking at a total cost of $28.94 for one digital to analog converter box.

That’s quite a jump from the $5 or less many thought they would be able to purchase the box for when Echostar introduced the model back in January. At that time, DISH Network was promising a unit called the TR-40 which would retail for around $40. In that case, all the customer would really have to pay for is tax. DISH Network boss Charlie Ergen said at the time, the company would actually be losing money on the unit.

Well of course companies aren’t in business to lose money, so eventually the TR-40 was re-branded as the DTV Pal and upped in price. In the meantime, many who applied early for their $40 government coupon have seen them expire as they have been waiting for the TR-40 to be released. While rumor is there is still a less expensive TR-40 on the horizon, no mention of it was made in the latest press release from DISH Network.

Advantages of the DTVPal include an analog pass through feature. This means the unit can take both digital and analog signal and transmit them to the television. Some smaller stations are not required to make the digital switch in February 2009, so the DTVPal will work in these areas as well.

Other features on the unit include a setup wizard, programming guide that reaches seven days out, parental locks, an auto tune timer, search function, program recording capability with a VCR, and a remote control.

DISH Network also bragged in the release of the “top choice” rating the DTVPal was given by CNET recently. DISH is supporting the DTVPal with customer service agents and technicians who will help with installation and troubleshooting issues.

Speculation and rumors surrounding the DTVPal continue to make rounds on the internet, as Dish Network and Slingbox have done a poor job in defining the product.  Once known as the Echostar TR-40, the latest information has the DTVPal actually becoming a different product. 

A few reviews of the DTVPal have finally sprung up, and CNET for one seems to like the product.  Finding good, solid information on when the product will be released, and where it will be available is another matter.  Case in point, calls to DISH Network’s customer service center have resulted in differing accounts on when the product will even be available. 

Calls to retailers such as Wal-Mart, Radio Shack, and Best Buy have not resulted in any solid information as to if/when they will even have the product.  Many have no product knowledge at all regarding either the Echostar TR-40 or the DTVPal.  The product is scarce among online retailers as well, with only a few accepting pre-orders, and comments here recently that those who have placed orders have in some cases received e-mails that their order has been cancelled.

Visits to the DTV Pal website don’t fill in the blanks either, other than vague information that the product will begin selling in late June.  According to CNET, the product release date will be today, June 19^th.   The latest news on the DISH Network DTVPal is that it is its own product, so to speak.  The price tag seems to have gone up as well, with the latest speculation having it priced at about $60 per unit.  That compares to the original TR-40 price of about $40.

So what exactly is the deal, as DISH Network and Charlie Ergen promised to offer the TR40 for about $40 at retail when the product was first introduced?  This would make the unit free for those who request a digital conversion government coupon.  Again, nothing solid has been released from DISH Network or Sling Media.

There could actually be two separate models, the DTVPal being released first with more bells and whistles.  DISH Network could sell that model for $60 for as long as demand warrants.  Later, as the February 2009 conversion deadline approaches, they could release the Echostar TR-40.   If it is actually more of a bare bones conversion box, maybe the cost won’t actually cause DISH Network to lose money, as Charlie Ergen said they would when they first released the mode.

Whatever the actual facts are regarding the Echostar TR-40 and the DTVPal, we shall soon find out.  Then we can all start waiting for the Echostar TR-50.