It’s Unknown How Much 3D Will Drive Revenue, DirecTV Says
Increased credit requirements for DirecTV subscribers helped bring down subscriber growth below company expectations in Q4 of 2009, the company said during a conference call Thursday. The company gained 119,000 subscribers in the quarter, down from 136,000 in Q3. Despite the slowed growth in subscriber additions, the company can rely on a higher quality of subscriber as it rolls out new products, like multi-room viewing, it said.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
More stringent credit requirements, such as requiring subscribers to use credit cards and more closely monitoring local dealers, will help as the company increases its investments in the home, said CEO Michael White, in his first DirecTV earnings call as CEO. He said the company “wants to make sure customers won’t leave six months after you sign them.” The company would like to focus its efforts on consumers more likely to stay loyal to the company for the full length of a contract, he said. A weaker economy and the competitive environment were also reasons for the increase in churn, the company said.
The company could begin talking about the procurement of a new satellite this year, though the launch of DirecTV 12 in December added enough immediate capacity for new services, like 3D, it said. How much revenue the company’s 3D service will generate continues to be a mystery and there will be a “lot to learn” based on how many 3D-enabled TVs are sold, said White. The company will also repurchase $3.5 billion worth of stock, which it considers undervalued, it said.
DirecTV Latin America had a 59 percent increase in net subscriber additions, bringing in $839 million in revenue for Q4, up from $572 million a year ago. Total DirecTV Latin America subscribers grew 18 percent to 4.59 million at the end of 2009, up from 3.88 million at the end of 2008. Much of the growth was due to increased DVR and HD services penetration, the company said.
Meanwhile, continued demand for HDTV helped Eutelsat Communications increase its revenue by 9.6 percent to $692.2 million and $594.8 million in the second half of 2009 compared to the same period in 2008, the company said. Video made up 72 percent of the company’s second half revenue, growing 7.4 percent to $458.6 million. TV channels broadcast over Eutelsat’s fleet grew by 7.1 percent in the half, year-over-year, to 3,448, while HDTV channels increased by 37 percent to more than 100, it said.
Data services also grew in the half, up 15.2 percent, to $131 million. Data services and value-added services made up 19.2 percent of the company’s total revenue. It saw an increase in clients using its satellites as Internet-backbone in regions without fiber, said Eutelsat. It reported fill rate of 87.4 percent of its 609 transponders in-orbit.