Monday, November 26, 2007

Local satellite industry veteran George Gonzalez sees an opportunity in the skies.

Gonzalez, who founded and later sold a company that makes network equipment for other satellite companies, is preparing to launch a venture next year called XstreamHD that will offer high-definition programming. The company has been developing the product in stealth for five years.

Instead of carrying live television feeds, like the top satellite TV players do, XstreamHD will allow customers to download content on demand onto a specially designed set-top device. Users will pay a monthly subscription and additional fees for the content they download. Gonzalez said he hopes to reach an audience of high-definition television owners who are hungry for more programming options.

"Right now, people buy into the high-definition TV experience only to get home and find that there's just not much content available for them," he said.

Gonzalez said that the monthly fee will be close to a monthly TiVo subscription -- or about $13 -- and that a movie from the service should cost about the same as what consumers now pay at a video rental store.

XstreamHD will enter a market where two satellite TV services already offer content in the high-definition format. EchoStar's Dish Network and rival DirecTV both carry more than 70 HD channels. Cable providers have also been racing to bulk up their high-definition content offerings.

Gonzalez wouldn't say which movie studios have agreed to provide content for his service. That announcement, he said, will be made in January at the Consumer Electronics Show in Las Vegas.

Before starting his latest venture, Gonzalez was founder and president of iDirect Technologies, a Herndon company that makes modems that connect to the Internet via satellite. The firm was started in 1994 with the hopes of becoming a telecom giant and competing with the likes of WorldCom. But in 2005, it was acquired for $165 million by Vision Technologies Systems -- the Alexandria aerospace division of global defense contractor Singapore Technologies Engineering.

One satellite industry analyst said it is too early to tell whether XstreamHD will be successful.

"This is a perfectly good idea, but will it be a hit? I can't say," said Roger Rusch, president of TelAstra, a satellite telecommunications consulting firm.

Rusch said it's tough to grab the attention of consumers in an era when there are already so many ways to get video entertainment content in the home, such as iTunes and Netflix, not to mention traditional cable and satellite TV offerings.

"It's hard to know what consumers are going to latch onto," he said. "There are a lot of options out there."

-- Mike Musgrove