DirecTV faces 'challenging' program costs

Satellite TV giant may focus on 3D movies, sports

NEW YORK -- DirecTV sees increasing programming costs as a key challenge that must be managed with care, a top executive from the satellite TV giant said Monday.

Speaking at the Credit Suisse Global Media & Communications Convergence Conference in Palm Beach, Florida, Jon Rubin, senior vp, financial planning, was asked about the Cablevision-ABC dispute that kept ABC from Cablevision viewers until after the start of Sunday's Oscars telecast.

"This is a hard issue for us," he said. "We got to take hard stances," including, in some cases, dropping smaller channels with higher fee expectations. He mentioned Comcast's Versus as an example. "We just can't run a business with deteriorating margins," Rubin said.

Passing on higher program costs to consumers may sound "fine and dandy," but is "more challenging" when consumers already pay a lot and competition is intense, he emphasized.

Rubin was bullish on subscriber growth momentum for 2010, even though "the competitive landscape remains tough."

Asked about the prospects for 3D offers, which DirecTV has in the works for this year, Rubin said this is "probably not a mainstream product this year or even next year," but holds much promise and fits DirecTV's DNA.

He said the firm would focus on offering 3D movies and maybe some sports.
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