DIRECTV Continues Subscriber Growth

DIRECTV reported their quarterly results last week, and it was business as usual for the company, which continued to add subscribers despite the slowdown in the US economy.

For the second quarter 2008, which covers the months of April through June, DIRECTV added 129,000 new subscribers. Analysts predicted the satellite TV Company would add 122,000 subscribers, while the company added 128,000 in the same quarter 2007.

The second quarter is traditionally the slowest quarter for new additions for satellite television providers DISH Network and DIRECTV. DISH Network also reported earnings last week, and actually lost 25,000 subscribers during the last quarter.

DIRECTV continues to impress in the area of customer churn. Their customer losses were reduced to 1.49 percent versus 1.58 a year ago. DISH Network has struggled with their churn number, as it increased to nearly 2 percent during the most recent quarter. A number of factors have contributed to DIRECTV’s low churn rate, high among them their strong penetration in the advanced services area. These services, which include DVR and HD or high definition programming, hook customers as they enjoy the feature rich technology.

DIRECTV’s average revenue per subscriber, or ARPU increased as well to $81.80 a jump of 7% over last year’s number. The third quarter ARPU number should be interesting, as this is when subscribers pay up for the privilege of watching wall to wall NFL coverage with the Sunday Ticket package. Average revenue for those subscribing to advanced services like DVR’s or HD was over $100 a month.

Overall, it is quite remarkable that DIRECTV has been able to continue to add subscribers against strong competition from cable and Telco companies. Verizon FiOS and AT&T U-verse television services continue to expand, and Comcast and Time Warner have finally begun to up their HD offerings, while at the same time offering triple play bundles of voice, video, and high speed internet.

DIRECTV CEO Chase Carey continued to promote DIRECTV as the HD leader, downplaying DISH Network’s recent HD expansion. Carey said they have a position of leadership due to DIRECTV “being their first.”