"DBS has done a good job of blurring what on-demand is," says Bruce Leichtman, president and principal analyst of Leichtman Research Group Inc. (LRG) . "It gives them the ability to say they have on-demand even though a vast amount of customers won't have access to it."

    "To their credit, satellite operators have done a good job of placing themselves in that genre," agrees Jimmy Schaeffler, chairman and senior research analyst for The Carmel Group , which tracks the direct broadcast satellite industry. "But the jury is still out on how successful it will be relative to pure VOD."

    Cable, Leichtman says,finds itself in a similar spot with its wireless co-venture with Sprint Nextel Corp. (NYSE: S - message board). It gives MSOs such as Comcast, Time Warner Cable Inc. (NYSE: TWC - message board), Cox Communications Inc. , and Bright House Networks a place at that table, despite the fact that availability of the "Pivot" service remains limited.

    Although cable offers VOD via a two-way network and generally has a much larger vault of new and library titles available on-demand, "the message of cable's [VOD] offerings has not gotten through to the DBS subscriber," Leichtman says.

    But other than disallowing cable and telco TV providers from owning the VOD category, what else can DirecTV expect to get from its budding service?

    "Next to nothing,"Leichtman predicts of the overall impact. "But who knows if that will be good or bad. The whole idea is retention, anyhow," he adds.

    Still, the limitations of the DirecTV On Demand offering, on a macro level, still point out a recurring concern that satellite TV players still lack a two-way infrastructure, which not only impacts VOD offerings but the ability to bundle together multiple services, Schaeffler says.

    Part of that question was addressed earlier this month, when DirecTV teamed up with Current Communications Group LLC as part of a plan to begin marketing powerline-based broadband services by the end of this year or early 2008, starting in the Dallas-Ft. Worth area. DirecTV and EchoStar are also moving ahead with WiMax in partnership with Clearwire LLC (Nasdaq: CLWR - message board).