DirecTV sets out road map
December 3, 2010
By Chris Forrester
DirecTV says it expects to add a net 200,000 US subs in this fourth quarter of the year, taking its total to just over 19m, and a very healthy $24 billion in annual revenues. But its future prospects over the next three years, claimed CEO Michael White, include a subscriber base of 30 million, and annual revenues of $30 billion.
White said the economic downturn isn’t affecting subscriptions, but instead saw the broadcaster increasing market share. White told analysts that it would be taking a “more segmented” approach to its marketing and sales efforts, including being more pro-active as far as existing subs were concerned, and also making a greater effort to win back former subscribers.
He added that DirecTV will be creating lower-cost bundles that he hoped would appeal to cable subscribers. White added that the packages will likely attract customers who are used to paying $30 a month for TV and not the more frugal $15-a-month customers that cable providers are losing.
However, EVP of content strategy Derek Chang warned that with channel carriage fees rising, and for sports channels this often meant double-digit percentage increases each year, meant overall that DirecTV was having to look even harder at its channel line up. In some cases, he added, this meant certain carriage deals would not be repeated if the channels were not necessary or worth their cost.
Analysts at brokers Collins Stewart say they expect DirecTV to increase its share buy-back operation, eventually representing about one third of its issued stock, with this year’s start of $5.5bn-worth bought back.