DirecTV Will Continue To Partner With Telcos To Distribute Content

DirecTV is committed to allowing subscribers to access content whenever and wherever they want “regardless of the telecom platform,” White said. “We think it’s important that they can ride on any of those highways in a seamless way.” For DirecTV, “a greenfield entry into the wireless business, wasn’t in our best interest,” he said.

DirecTV will maintain the partner approach to accessing content, White said. DirecTV also will focus on “making sure we stay agile in any competitive landscape,” he said in response to a question about Dish Network’s $25.5 billion bid for Sprint Nextel. The Connected Home product is in nearly 4 million homes, and DirecTV is building out its cloud infrastructure this year, he said. “You'll see more seamless movement of content across the different areas,” he said, referring to broadband in the home and mobile platforms. “That doesn’t change the primacy of the big-screen TV in the home to watch the big game or American Idol."

DirecTV offers 83 channels to be streamed live in the home and it’s looking to expand that offering, White said. “We're building out our streaming library.” It also plans to expand its 38 networks available on demand, he said. White said the second-generation Genie is rolling out this year and a new NFL Sunday Ticket application will include fantasy football features. DirecTV recently renewed (CD April 18 p21) its programming agreement with the Seattle Mariners baseball team, White said. The DBS company renegotiated the deal, which was to expire in 2015, he said. It was done without a dramatic increase in subscriber fees, he added.

DirecTV Q1 revenue grew in the U.S. and Latin American markets. Revenue grew 16 percent to $1.73 billion in the Latin American market, White said: The strength of the DirecTV and Sky premium brands “helps drive consumer demand across the region.” There has been solid subscriber growth from middle-market segments, he said. The revenue growth in Latin America reflects DirecTV’s ability to grow average revenue per user (ARPU), he said. The Q1 results for the U.S. are strong and reflect DirecTV’s goal of rebalancing its top and bottom lines to achieve sustainable and profitable growth rates, White said. DirecTV stock closed up 6.9 percent at $61.95.

DirecTV plans to reinforce its leadership position in Latin America with advanced services, White said. Competitive intensity in Brazil is growing, said Bruce Churchill, president of DirecTV’s Latin America market. “We're seeing more aggressive offers on the HD side.” The penetration of HD sets is pretty high in Latin America, he said. In the market, competitors are starting to offer lower-priced entry level prices for HD, he said. The World Cup is around the corner which tends to be a big driver of HD adoption, Churchill said. About 583,000 net subscribers were added at DirecTV’s Latin American operations, he added. Churn there was at 1.74 percent, up from 1.47 percent in 2012. The elevated churn is driven by a higher number of middle-market customers and increased competition at the entry level price point, Churchill added.

The U.S. market’s 5 percent revenue growth to $5.79 billion in Q1 was primarily driven by ARPU growth of 4.4 percent, said Patrick Doyle, DirecTV chief financial officer. A key driver of this growth was increased penetration of new and existing customers paying for Genie and other advanced services, and policies to reduce credit and discounting, he said. Pay-per-view revenue was up 20 percent, he said. Average monthly subscriber churn increased slightly at 1.45 percent. The lapse of DirecTV’s programming agreement with Vietnam-based TVB USA continues to affect churn, he said.