Q&A with DirecTV's Chase Carey
The satellite operator's CEO aims to gain "a million new subscribers a year" with enhanced, interactive offerings cable rivals can't match
Like Rupert Murdoch, 50-year old Chase Carey has been waiting much of the last five years to run a satellite TV operation in the U.S. A Harvard MBA and former college rugby player, Carey worked his way up the News Corp. (NWS ) ladder to become co-chief operating officer in 1996.
In 2000, Carey expected to become head of Sky Global Networks, Murdoch's short-lived plan to combine his combining his satellite operations in Britain, Italy, and Latin America with a newly acquired U.S. satellite company. That idea flopped when Murdoch lost his U.S. prey, DirecTV, to Echostar's (DISH ) Charlie Ergen. But Murdoch last year made a successful $6.8 billion bid to buy a 34% controlling stake in Hughes Electronics, DirecTV's parent, and on Dec. 22, Carey was named DirecTV CEO. That puts him in charge of the nation's largest satellite operator, with 12 million subscribers and counting.
Carey sat down with Ronald Grover BusinessWeek's Los Angeles bureau chief, at Hughes' offices in El Segundo, Calif., on Dec. 17 to discuss his plans for DirecTV and how it will compete with cable operators. Edited excerpts of their conversation follow:
Q: The cable industry says it's ready for you, that their combination of video, phone, and data makes a very competitive alternative to satellite, which doesn't offer phone service and provides very expensive data service.
A: Cable loves to have their spin, and they've had their spin for many years. They learned from John Malone many years ago, when he predicted a 500-channel universe a decade before they figured out how to deliver it.
We think the most important drivers for us will be local stations -- we're going to add 70 new markets in the next 12 months -- and the DVR [digital video recorder]. We think the DVR is a transforming device, and we have a leadership position. You look at the cable industry, and it was all about video on demand until that didn't work.... Now, they're singing the DVR's praises.
Q: What is DirecTV's game plan for taking on cable?
A: The idea is to make television the best experience that we can.... If you look at the pieces that tie together to create a television experience -- interactivity, an [expanded, sophisticated] electronic program guide -- we have a leadership position in them around the world, and we're looking to build on those capabilities.
Q: How many subscribers do you think you can add?
A: We're in a transitional phase, and I don't want to be in a position of offering guidance. But from the News Corp. perspective, we have talked about a business where we should be hitting a million new subscribers a year. And if we add the product enhancements, I think we can get there.
