DirecTV Q3 Revenue Increases With More NFL Ticket Renewals, Genie Upgrades
DirecTV increased Q3 revenue by 6 percent to $7.88 billion compared with the same period last year. More customers paid for advanced services and the company had more renewals for its NFL Sunday Ticket last quarter, DirecTV executives said Tuesday during a conference call.
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The company is pleased with the NFL Sunday Ticket performance, said CEO Mike White. “We had more renewals than we were expecting.” But fewer subscribers added the service, he said. Renewals contributed to gross adds in the quarter, White said. DirecTV is working to continue its partnership with the NFL, he said. “We're having good talks with the NFL and those talks are progressing. … We expect to get a deal done.” But the deal isn’t just about economics and it will take some time to work through, White said.
For the U.S. market, the company had growth in average revenue per user and subscribers, said Patrick Doyle, chief financial officer. Revenue rose to $6.17 billion, a 7 percent increase compared with Q3 2012, DirecTV said. The key driver was increased penetration of new and existing customers paying for advanced services, including Genie and a new enhanced warranty program, he said. Fifty-five percent of subscribers have either the Genie or an HD DVR, he said. About 40 percent of customers are paying an extra $2 monthly for a warranty program that allows them to upgrade to the latest product features every two years, Doyle said. Churn was higher due to the highly competitive pay-TV landscape and the company’s carriage-fee consent dispute with Viacom last year, he added.
The additions of gross subscribers benefited slightly from the since-resolved retransmission consent spat between Dish Network and Raycom, which resulted in blackouts in some markets, White said. The impact was less than 5 percent, he said. “I made it a policy decision that we wouldn’t try to take advantage of these circumstances,” White said. “I don’t think it’s smart because what goes around comes around on these disputes."
DirecTV isn’t very concerned about the pending joint venture between EchoStar and Vivendi-owned GVT, (CD Oct 2 p18), said Bruce Churchill, president of DirecTV Latin America. “We've been competing for a long time,” he said. “We believe we're well-positioned and prepared to take on any competition that may arrive.” If the partnership goes through, it won’t dramatically change the landscape, he added.
Customers will begin demanding other alternatives to receiving content if retrans fees continue to rise, said White in response to a question about whether DirecTV has an Aereo-like service planned. “Nothing is imminent,” he said. However, DirecTV’s fees are up 50 percent, he said. Customers will insist on saving money and begin to put up their own antennas if retrans fees continue to go up, he said.