Significant growth for DirecTV will likely happen in 2014, said Patrick Doyle, DirecTV...
Significant growth for DirecTV will likely happen in 2014, said Patrick Doyle, DirecTV chief financial officer. DirecTV is investing an additional $200 million in customer services, he said Wednesday during a webcast of a presentation at the Deutsche Bank Media,…
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Internet and Telecom Conference. The investment is targeted to certain types of customers and certain activities, he said. “It’s a certain quality of customer that’s proven that we really need to invest in them,” such as customers who have been on the platform for five years but aren’t getting a service, like the Genie whole-home DVR feature, he said. The company also is assessing customers’ upgrade tendencies and churn propensities, he said. “We view 2013 as a high water mark,” Doyle said. Half of the $200 million of additional spending is capital expenditure, he said. Capital expenditure for 2014 should look like it did in 2012, he said. Commercial services and movies produced double-digit growth in 2012, he said. “We think we can grow commercial in double digits” for 2013, he said. Doyle said he doesn’t expect significant growth in ad sales this year, “but maybe 2014 and beyond.” To improve U.S. revenue growth, DirecTV will focus on ancillary revenue streams, Doyle said. With programming costs increasing, the industry has been prudent with its customer pricing, he said. DirecTV’s implementation of a surcharge tied to carrying sports channels in some markets has been met with mild reaction from subscribers, Doyle said. “We tested putting in an RSN [regional sports network] for existing customers in those territories,” he said. “We've seen very little reaction from those price increases. … We're starting to see competitors go down that same route.” Internally “we spend time looking at economics,” he said. DirecTV has a dialogue with NFL, and the company is willing to renew programming at some increase that’s reasonable, he said. “If it goes up, we may go non-exclusive or decide not to carry it.” The DBS company is watching closely how its market in Venezuela is affected by the death Tuesday of President Hugo Chavez. Venezuela is profitable and “one of our best businesses,” he said. “We don’t put anymore U.S. dollars in there,” he said, referring to the devaluation of Venezuela’s currency. “With the death of Chavez, we'll see how that market turns out.” Doyle also said he expects to see growth in the Brazil market: “We've seen high desire for Brazil customers to move into upgraded products. They want the HD product, the DVR product and they're interested in multi-room viewing products.”