DIRECTV Announces Second Quarter Results

[mike123abc]

WRAPUP 1-Americans drop pay-TV; business matures in weak economy | Reuters

NEW YORK, Aug 2 (Reuters) - Stubbornly high U.S. unemployment, a weak housing market combined with a mature business prone to regular programming blackouts has seen more than 400,000 American homes drop their pay-TV service since the start of the year.

The cable industry wants to blame the economy. Perhaps it is the economy that is finally opening peoples eyes and they see that they can get along without cable. OTA networks still have the highest ratings with now clear HD, combined with being able to watch most cable network shows over the internet, could mean that many cord cutters could never return to cable.

I personally have been considering it. I wobble back and forth. I will probably go another year. Even though I can afford it does not mean I do not feel like I am being ripped off now. Right now it is slightly cheaper to subscribe than to buy every episode I watch on cable at $3/episode. Essentially if your bill is $100/month you could buy a $3 HD episode every day, available when you want to watch it in HD without any commercials or pop ups. This of course is assuming you are able to get free OTA (which I know not all can do).

It looks like it is going to be a battle of who loses the fewest subs a quarter between Cable/DBS companies. Gone are the days of 100k+ subscriber additions...

 

[gadgtfreek]

I could actually go without a lot we watch. Leverage, Glades, Wild Alaska, etc... just to name a few for example.

My problem comes in to really liking HBO/Max/Show/Starz original stuff, and of course ESPN is required from Aug to Jan.

 

[mike123abc]

I could actually go without a lot we watch. Leverage, Glades, Wild Alaska, etc... just to name a few for example.

My problem comes in to really liking HBO/Max/Show/Starz original stuff, and of course ESPN is required from Aug to Jan.

Live sports is probably the biggest reason people do not drop. But, then again if enough drop ESPN will not be able to get the content and there will eventually be another means of distribution (like going back to OTA, or internet streaming service).

 

[gadgtfreek]

I think those ACC and SEC contracts are locked down for a long time. I've also wobbled, but Ive relegated myself to the one 5 tuner HDDVR, a 2TB EHD, and get ALL my content from Directv now. My Apple TV and Roku are just backups.

 

[DS0816]

DirecTV waves goodbye to 52,000 subscribers in first ever net loss of customers.
DirecTV waves goodbye to 52,000 subscribers in first ever net loss of customers - Engadget

The revelation came in its second quarter filing, which claimed that the exodus is actually a purge -- due to a tighter credit policy and a change of focus toward "higher quality" customers.

What does "higher quality" mean? That DirecTV is tossing aside unemployed (even if they had been employed when having first signed up)?

 

[DS0816]

Seems like every cable system is also losing subs... Perhaps one day they will figure out that raising prices every year is too much.

I was listening to a podcast of Endadget. It was about DirecTV/Viacom, and one of the hosts mentioned that the model for cable television subsription is outdated. That may be true.

 

[tigerfan33]

I think those ACC and SEC contracts are locked down for a long time

Listening to Mike Slive interviewed several times on the subject of a SEC network. He has hinted several times an announcement should be coming within a year.

 

[riffjim4069]

Im a bit dissapointed, but they are still lost less customers than Dish over the past few years.

...and less retailers too!

 

[riffjim4069]

So how does DirecTV losing 52K customers bode for Dish? Sure, they had an aggressive "Hopper" campaign, but the economy is still hurting, more and more people are doing without pay TV or finding alternative video sources, Verizon FiOS (added 120K subs) and AT&T Unverse (added 155K subs) has solid gain...but their numbers are also down. Then you have the AMC fiasco! Offhand, I'm predicting their Hopper ads kept their numbers relatively flat (-20K to +20K).

 

[mike123abc]

So how does DirecTV losing 52K customers bode for Dish? Sure, they had an aggressive "Hopper" campaign, but the economy is still hurting, more and more people are doing without pay TV or finding alternative video sources, Verizon FiOS (added 120K subs) and AT&T Unverse (added 155K subs) has solid gain...but their numbers are also down. Then you have the AMC fiasco! Offhand, I'm predicting their Hopper ads kept their numbers relatively flat (-20K to +20K).

Dish is supposedly down 10k.

 

[jcrandall]

Viacom didn't factor into the 2nd quarter. Dispute started a week into the 3rd quarter.

Sent from my iPhone using SatelliteGuys

Ouch, that makes it much worse than I thought at first.

And the release about credit worthiness, if customers pay their bills Directv doesn't eliminate them, so I won't put much thought in that.

That said, Cablevision lost triple what Directv did on the earnings announcements this week, and Dish has had much more frequent sub loss quarters.

 

[cj_views]

Im surprised noone has linked this:

DirecTV loses subscribers ... on purpose - Fortune Tech

I wouldn’t bet on it; the trend has just begun. The churn rates will continue to rise for both providers (DTV and Dish). The DBS TV is a declining business. People that are under 30 prefer tablets and smartphones for their entertainments, and NOT through a bulky satellite dish. Besides, most public domicile buildings will not permit any mounting of dishes. DTV is pitching its “Everywhere Streaming” services for Ipads and other similar mobile devices which require enormous amount of wireless bandwidth. Dish has already started on this path:

(Ergen, 59, told the Milken Institute Global Conference on Tuesday his company is trying to provide all three major services to homes and on mobile devices within 10 years. "When we go install video in your home we can say, 'No matter where you are, you can take that video with you,'" Ergen said. "You can also get your broadband and make your voice calls." In March, Dish, based in Englewood, Colo., completed its purchase of two satellite operators, DBSD North America Inc. and TerreStar Networks Inc., whose wireless licenses it hopes to use to offer broadband Internet access.) - Ergen lays out Dish Network's 10-year plan - Yahoo! News

DTV has started doing its catch-up to Dish Network and is currently looking for a mobile partnership that can provide for its bandwidth demand on “Everywhere Streaming” services.

(DirecTV appears to be signaling an interest in partnering in some fashion with Clearwire, based upon a recent filing it made with the FCC. In the filing, submitted in regard to Verizon Wireless' proposed $3.9 billion deal to acquire AWS spectrum from SpectrumCo (a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks) and Cox Communications, DirecTV urges the FCC to require that the cable companies with a minority interest in Clearwire divest their holdings.) - Rumor Mill: Is DirecTV interested in partnering with Clearwire? - FierceWireless

The bottom line is DTV will continue to lose its subscribership going forward, no doubt.

 

[CK SatGuy]

I could actually go without a lot we watch. Leverage, Glades, Wild Alaska, etc... just to name a few for example.

My problem comes in to really liking HBO/Max/Show/Starz original stuff, and of course ESPN is required from Aug to Jan.

You could probably get away with keeping the lowest package (like entertainment or choice) throughout the whole year and add or remove the premiums whenever needed, i.e. HBO in the Summer then switch to SHO in the fall, etc...

 

[harshness]

Im surprised noone has linked this:

Largely because it isn't news. DIRECTV has been saying that cutting off the deadwood has been part of their goal for years now.

Of course now, there's a question of whether or not it was at DIRECTV's hand or a statement from subscribers about what they're doing.

The new Olympic campaign about "NFL Sunday Ticket is included" is surely going to hurt down the road.

 

[harshness]

What does "higher quality" mean? That DirecTV is tossing aside unemployed (even if they had been employed when having first signed up)?

It is pretty much impossible for DIRECTV to know why someone isn't paying. Do you expect that they're going to call all of those who aren't paying and somehow carry those who claim to have fallen on hard times? Paying dozens of dollars for DIRECTV service is not exactly an absolute necessity so maybe they're doing some a favor.

If you're going to use the argument that past history is of great value, you're kind of insisting that they weren't giving you the value you deserved.

 

[harshness]

The bottom line is DTV will continue to lose its subscribership going forward, no doubt.

DIRECTV lost fewer customers in Q2 2012 than they did in Q2 2011. What is going on now is a failure to add as many customers. Their characterization of the net numbers as being a result of a housecleaning is arguably a deception.

 

[TheForce]

My daughter dropped D* over 18 months ago due to cost. They use Netflix with a Roku and find that best suits their needs and budget. Saving over a thousand a year.

I dropped D* about 4 years ago when I could no longer justify the cost of redundant programming sources. Dish won out primarily because of the DVR technology.

I traded stock with both companies but stopped with DTV because they were spending all their profits buying back stock. At the time I was interested in companies that pay dividends as a company that buy's back stock requires an investor to cash out of his investment in order to make a profit. That defeats the purpose of an investment or a trade, as the company keeps inflating the price of the stock with their buybacks. It may look good for one trade but if you want back in it costs you your gains and then you lose on the taxes. Stock buybacks rip off the shareholders, IMO. They use revenues to buy stock rather than hold rates down or expand services for customers. DTV appears to be a well run company heading for private ownership. I held onto Dish a little longer as they had a track record of modest growth combined with a special dividend. But after seeing the new management, I lost faith in the company's new CEO and sold on a small mood boost in the price and broke even for the year. Moved the proceeds into Verizon!

As a customer, if you like what they offer, then you'll do fine. It's not for everyone.

 

[riffjim4069]

WRAPUP 1-Americans drop pay-TV; business matures in weak economy | Reuters

The cable industry wants to blame the economy. Perhaps it is the economy that is finally opening peoples eyes and they see that they can get along without cable. OTA networks still have the highest ratings with now clear HD, combined with being able to watch most cable network shows over the internet, could mean that many cord cutters could never return to cable....

Yep, if it weren't for Sports programming we could live just fine without the handful of regular shows we watch on Cable. Of course, we would then have to pay a premium for "Internet Only" service, which is a tough pill for me to swallow. Anyway, unless Dish (tomorrow), Cox, Charter and Cablevision (today) can post some positive numbers---which I doubt---it looks as though the economy and streaming video are going to take another bite into Pay TV.

AT&T U-Verse +155,000
Verizon FiOS TV +120,000
DirecTV -52,000
Time Warner -169,000
Comcast -176,000
Charter (2Q report on 7 Aug)
Cablevisoin (2Q report on 7 Aug)
Cox (???)
Dish/SATS (2Q report on 8 Aug)

Offhand, I am expecting Cox -40K, Charter -35K, Cablevision -26K and Dish/SATS -10K. We shall see.

 

[riffjim4069]

You know, given the prolonged economic downturn I see business after business failing; strip malls and office buildings are dotted with vacant retail and office spaces. However, I haven't heard of one cable channel going under. Heck, even Oprah's OWN is managing to keep the doors opened. Granted, I'm not in the business...but shouldn't we be seeing a number of the bandwidth wasters (you know the type...channels that show 12-hours of comercial-laden reruns followed by 12-hours of infomercials) cease operations. Programmers may need to rethink these bundling these channels because consumers appear to be less willing to pay for them these days.

 

[riffjim4069]

Since I can't edit my post...Cablevision and Charter just posted 2Q results. Overall, DirecTV didn't do too bad considering...

Charter -66,000
Suddenlink (11th largest) -20,100
Cablevision +0