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In 3D’s Lead Pack

2/28/2011 12:01 AM Eastern

DirecTV now offers a trifecta of 24-hour 3D television networks. But is anyone watching them?

On Feb. 13, the satellite-TV operator was the sole affiliate for the debut of 3net — the network owned by
Discovery Communications, Sony and IMAX — and the following day, the previously part-time ESPN 3D went
around-the-clock as well. Those joined DirecTV’s own n3D, a linear channel with a mix of music, nature and
sports programs.

Then came Comcast’s Feb. 20 launch of Xfinity 3D, a linear channel designed to blunt the No. 1 satellite player’s head start.
Derek Chang, DirecTV’s executive vice president of content strategy and development, spoke with Multichannel News technology
editor Todd Spangler about TV’s new dimension. An edited transcript follows:

MCN: Why is 3D important
for DirecTV strategically?

Derek Chang: 3D is important
for us because it’s
a new technology in the
space, and we’re obviously
leaders in technology.

MCN: But there are so
few 3D sets out there now.
Aren’t you too early to the
market?

DC: You’ve got to start
someplace. The way our
engineers designed our system,
it’s a relatively low incremental
cost to offer 3D.
We have the capacity, and
we have a way to get signals
to our customers — any
subscriber with an HD box
can get it. We also wanted to
spur the content guys to get
into the game.

MCN: But there are costs
to acquire and produce 3D
content, right?

DC: Clearly there’s cost. But
again, it’s kind of a chicken-and-
egg thing. Nobody is
going to get 3DTVs unless
there is content. Everyone’s
trying to gauge what the
market is. You see ESPN
and 3net — clearly those guys are jumping in and putting
money behind this.

From our standpoint, it made sense to start seeding the
market … to make customers realize this is a real thing
and not just something in the ether.

MCN: Has 3D viewing by subscribers met
expectations?

DC: I don’t think we had formal expectations … We
can clearly measure how much usage there is, and
it’s obviously been small to start, but it’s been growing
and it will continue to grow. It will depend on how
hard the TV [manufacturers] push. Passive versus active
glasses will definitely help [because passive 3D
glasses are lighter and less expensive].

MCN: Why isn’t DirecTV charging extra for a 3D tier?

DC: That’s something that is under consideration. In the
future that is likely something we will do.

MCN: But why not at first?

DC: We decided that at first there wasn’t enough content.
Now there’s starting to be, but at first you want to
whet the appetite of customers. The content is going to
cost money, and eventually you have to charge the customer
for that.

MCN: Except for sports, aren’t
people going to prefer to
watch 3D entertainment on demand?

DC: I think it’s too early to tell. A
lot of the viewing is shifting that
way, and maybe that does become
the model, but I think it’s
too early to tell how customers
will watch 3D.

We are just trying to get content
out there to the customers,
frankly, whether that’s [videoon-
demand] or linear. What’s
important is that it’s getting out
there.


MCN: DirecTV in January
2007 said it would add 100
HD channels before the end
of the year. That set off a rush
for programmers to get HD
simulcasts up. Do you foresee
a similar stampede toward 3D
at some point?


DC: I think it’s still early. Some
of the programmers are trying
to assess whether 3D makes
sense for them. But over time,
if 3D is successful, you are going
to see the same dynamic,
and that the guys who are late
will have trouble getting on.
But again, it’s still early on
3D, and it’s hard to tell how
successful this will be. Quite frankly, nobody really
knows whether this will be as successful as HD.

MCN: What do you see as the biggest inhibitor for
broad adoption of 3DTV?

DC: I think it’s a combination of things still. We’re still in
the early stages of content.

Listen, [DirecTV’s n3d was] the only 24-hour
channel until this month. There’s not a ton of content
now.

MCN: What’s been some of the best 3D television
you’ve seen?

DC: Anything that DirecTV offers. [Laughs] The sports
have been very compelling. And the movies we’ve been
showing are good experiences in 3D.

September