Verizon Communications is taking on DirecTV in the arms race of high-definition channel expansion by promoting delivery of more than 150 channels by the end of 2008.
Verizon plans to expand the number of HD channels available on its FiOS TV service starting in the spring of 2008. Initially doubling its current HD offering, which reaches 717,000 FiOS customers, to more than 60 channels, FiOS will also carry 1,000 HD titles on demand by the end of 2008.
"It makes sense given Verizon's network," says Sanford Bernstein analyst Craig Moffett, referring to the company's fiber-to-the-home system. "One of their obvious sources of competitive advantage is raw bandwidth."
The expansion plan is the most direct challenge to DirecTV's claims to offer 150 HD channels by the end of next year. The satellite television provider is making a strong push to differentiate itself from its competitors, particularly cable operators and their triple-play bundles, through its ability to deliver more HD channels. Over the past two months DirecTV has ramped up its HD package with additional channels, and currently offers 74 with a target of 100 by year's end.
Cable operators, which are boosting capacity through plant upgrades and switch-digital video, tout their HD offerings available on-demand as an advantage over satellite operators, which don't have comparable services. But cable stocks have been pressured by increased competition and slipped in October when Comcast Corp. reported 65,000 basic subscriber losses.
The FiOS service overlap for most cable operators is marginal save that of Cablevision, where it covers over 20% of the cable company's footprint. A spokesman for Cablevision, which currently carries 41 HD channels, says the company has "the capacity to add hundreds of additional HD channels" and that "the phone company is trying to play catch up in this critical category."