DirecTV will plunge into the home security market...
DirecTV will plunge into the home security market next year, building on its acquisition of LifeShield and its wireless technology, said DirecTV CEO Michael White on an earnings call last week. LifeShield, which has 100 employees and about 22,000 subscribers…
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to its Internet Protocol-based wireless home security service, will be DirecTV’s entry into a market that has a 20 percent U.S. install base, White said. In addition to ADT, DirecTV will be up against other security companies including FrontPoint Security, Vivint and Protect America, as well as cable operators like Comcast and Time Warner Cable that are venturing into the category. LifeShield’s service will be rolled out across the satellite network in 2014 and will be a “nice add on” to the company’s monthly average revenue per user, White said. DirecTV will put direct marketing, installation and service behind LifeShield, creating a “mini” bundle with its satellite offering, White said. “We're trying to make sure we get all of the ducks in a row executionally” before putting a major push behind LifeShield, White said. Bundles with the product allow remote monitoring via an app that’s available for iPad and iPhone, said DirecTV. The systems come with a Homescreen Touchpad that’s outfitted with a dashboard replete with surveillance and system safety widgets. The addition of home security will further expand DirecTV’s offerings of advanced technologies, including whole-home systems, that have about 4 million subscribers, up 55 percent from a year ago, said Chief Financial Officer Patrick Doyle. With programming costs increasing an average of 8 percent, DirecTV isn’t ruling out packaging a terrestrial antenna with its receiver to get broadcast networks, White said. DirecTV used to build the tuners into the receivers, and if retransmission fees and programming costs “get to a certain point, everything is on the table,” White said. DirecTV’s cost of installing such an antenna could be around $150, so it’s “probably not as attractive as it needs to be, but it’s a more attractive alternative than it used to be,” White said. “We'll see how the costs evolve.” Among its carriage agreements, DirecTV may consider dropping its Pac-12 college football package, because the conference wants to “put more into a bundle that’s already too big and tax all of the customers at a rate that we don’t believe is fair” for those who aren’t interested in it, White said. Meanwhile, DirecTV settled in July a 13-year-old patent infringement lawsuit filed against it by Pegasus Development Corp. and Personalized Media Communication (PMC), the company said in SEC documents. The suit, filed in December 2000 in U.S. District Court in Wilmington, Del., alleged DirecTV infringed four patents, including one covering the use of digital key information to decode a digital or analog information transmission that was encoded to prevent unauthorized access. The case also involved the so-called ‘825 patent that was granted PMC’s John Harvey and James Cuddihy in 1990 and described a signal processor system with a means for demodulating carrier transmissions. Gemstar, the remnants of which are now part of Rovi, was once an exclusive licensee for the patents, according to court records. DirecTV, which struck a tentative agreement with PMC in May, settled the case for an amount that won’t have a “material effect on our consolidated financial position,” the company said.