Posted on May 12, 2008
Filed Under DIRECTV |
In part three of our review of the DIRECTV conference call, we will recap the company’s comments on the acquisition of 180 Connect, working with AT&T, the multi-dwelling unit market, and their current relationship with TiVo.
Chase Carey, CEO of DIRECTV talked about the acquisition of 180 Connect, announced last month. Carey said that it will not only represent a chance to make a better first impression with the customer, it has the chance to be a good investment as well.
Wachovia questioned as to how DIRECTV sees the AT&T relationship playing out, as the resale contract with Echostar/DISH Network ends in 2009. Carey was fairly elusive, saying the companies were talking, but things would just have to play out.
Citigroup asked about where DIRECTV stands on the MDU (multi-unit dwelling) market, as FCC rules now permit satellite television companies to compete in certain areas that were in the past exclusive to cable TV operators. Carey said the research and development and engineering aspects of serving MDU’s, but now was the time to go out and execute on the sales and service fronts. Direct TV sees some benefit in ‘08 as far as penetrating this market, but overall sees it as more of a multi-year project.
Janco Partners asked about advanced services, and how many customers were subscribing to these services. DIRECTV said among new customers, more than 50% are taking HD or DVR or both. Carey said by 2010 they expect this number to be upward of 70%. He expects DVR to become as mainstream as VCR’s were or as DVD’s are today. Growth has been steady over several quarters with advanced services.
Janco also asked about VOD (video-on-demand) and if it would impact ARPU over the short or long term. Carey says the full rollout of VOD will happen in the second quarter, but its impact will be measured over several years, not just the next few quarters.
Sanford C. Bernstein inquired about the upcoming digital TV transition, and if Direct TVwould be targeting Hispanic customers in particular. Carey said it would be targeting all segments of the market that may be shopping for a pay TV provider. He did not feel it would be “a huge positive” but did think DIRECTV would get their fair share of the first-time pay TV market.
Collins Stewart asked about DirecTV’s relationship with TiVo, and whether DIRECTV would be interested in buying any cable networks. Carey said they aren’t totally opposed to buying a cable network, but it would have to be a good value for the money. He was not interested in “paying retail” for any sort of network. As far as TiVo, Carey said they have a “constructive relationship” but really did not go any further with specifics. It seemed as if DIRECTV is perfectly willing to continue with their own set-top box at this time.
Read DIRECTV Conference Call- Part 1
Read DIRECTV Conference Call- Part 2
Comments
The percentage of Direct TV customers opting for HDTV or DVR is surely going to go way up from 50%. I can see 75% or better within the next two years. Once you have either of these, or both, you just can’t go back.