DirecTV links up with Hitachi's HDTV

Hitachi is demonstrating the new TV with integrated DirecTV and USSB receivers at consumer electronics retailers across the country, and will begin shipping in the second quarter of 1999. The TV will sell for an estimated retail price of $7,999.

Integrating the satellite receiver into the TV set could well be an effective workaround for consumers intrigued by the high-picture quality of HDTV, experts say. Buzz is building for HDTV, but broadcasters only provide HDTV in limited markets and cable providers do not at all, which together means many customers can't get it.

"If I were Hitachi, I'd be rushing to do this," said James Burger, a partner with Dow, Lohnes & Albertson, which represents technology companies such as Intel and Oracle on telecommunications policy issues, as well as cable operators such as Comcast and broadcasters.

Nonetheless, he added that the high price of the units will probably preclude mass consumer acceptance at this point.

"For them, it's a wonderful thing; they make a nice profit. But explain to me how the vast majority of Americans are going to pay for this TV set," Burger said.

The set will also receive over-the-air, or terrestrial, high-definition broadcasting as programming becomes more widely available. Currently, terrestrial HDTV is only available in 10 test markets, and actual programming has been scarce.

"With terrestrial digital broadcasting, it's only available in selected markets, and there's a lot of confusion about when they're going to roll that out," said a Hitachi spokesman. "This programming will be available to everyone in the country by next year. There's no limitation by market size."

Burger was more blunt: "It's a failure, so far," he said.

The price of Hitachi's HDTV with a satellite receiver and premiums for high-definition content will be out of reach of most consumers, even home-theater enthusiasts, said Dave Mentley, an analyst with Stanford Resources.

"It's not mainstream," Mentley said. "The average projection TV price is around $2,000. But this will make people think about their options-- it's a good leading-edge indicator, and it seems to be important to let the customers know that you're including the option."

DirecTV currently has one channel of high-definition programming available on its service, because only Hitachi and Philips have developed TVs with integrated receivers, a DirecTV spokesperson said. The company will probably establish another channel next year, when the sets hit the market.

"The only place that you can view high-definition DirecTV is at retail stores that have these sets. We are currently broadcasting one channel in high-definition which gives the consumer a well-rounded view of what you could see--sports footage, movies, documentary, concerts, all that," said a DirecTV spokesperson, noting that the pricing for these offerings has not yet been set.

Hughes Electronics, which offers the DirecTV service, today announced it has purchased USSB for $1.3 billion in cash, in an effort to simplify DirecTV.