DIRECTV & EchoStar: HDTV Is Money!

[Poke]

http://www.tvpredictions.com/satfinance110806.htm


DIRECTV & EchoStar: HDTV Is Money!


The satcasters release their third quarter financial statements.
By Phillip Swann

Washington, D.C. (November 8, 2006) -- DIRECTV and EchoStar may be rivals, but they agree on one thing:

They want more High-Definition TV owners as subscribers.

The two satcasters this week released their third quarter financial reports and both noted that high-def owners are more likely to spend money on programming and new services.

"We increased the number of higher quality subscribers added in the quarter by 7% compared to last year. We're seeing that higher quality subscribers tend to buy more services -- particularly High-Definition and Digital Video Recorder services," Chase Carey, DIRECTV's CEO and president, said today in a statement.

In a conference call yesterday with Wall Street analysts, EchoStar CEO Charlie Ergen echoed that sentiment when asked if his company was successful in acquiring higher-quality subscribers.

"I think we had some successes in advanced services, principally DVR and HD," Ergen said. "We have had good growth on our DVR and HD business and hope to sustain that growth."

However, Ergen also noted that there might be a higher churn rate with high-def owners, compared to non-HD subscribers.

Overall, EchoStar reported a 33 percent drop in profits for the third quarter, largely due to a tax benefit in last year's third quarter. The company said it added 295,000 new subscribers, ending the quarter with about 12.8 million subscribers.

DIRECTV said it added 165,000 subscribers for the quarter and that it made a profit of $370 million, compared to $95 million a year ago.

 

[navychop]

I would expect there to be a LOWER churn rate with HD subs, as the percent with ViP units goes up. As the 921s and their problems fade, and the limited use 942s also get replaced, people are likely to be happier with their equipment and service offerings.

 

[Scott Greczkowski]

I would expect less churn from HD customers as most are locked into an 18 month commitment.

 

[TheTony]

The sat providers should hire me as a consultant, because I could have told them that HD subs are more lucrative years ago.

 

[Scott Greczkowski]

Unfortunately years ago there wern't enough HD customers to make it worth it to them.

Now its still not enough, but its getting close to where HD is a commonplace service.

 

[dfergie]

With HD sets being mass marketed In Wal-Marts etc many people have gotten them, now to get them to get HD so they can truly appreciate their sets... My car pool buddy has a 37" 720p plasma and is using a 522 with it...

 

[cforrest]

D* just said HD penetration was only 9% of total subs in their conference call. New subs, around 8% are HD. Didn't listen to E* conference call yesterday, would assume they are somewhere around that number.