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Satellite TV giant DirecTV is more confident about its full-year 2014 subscriber momentum than a few weeks ago when it held its third-quarter earnings conference call, CFO Pat Doyle said Tuesday.
Speaking at the 42nd annual UBS Global Media and Communications Conference in New York, he said the company’s confidence was “much higher” that it would have positive net subscriber additions for the full year. During the call, he had said: “Based on third-quarter subscriber results and current trends, we expect subscriber growth to be fairly neutral this year, slightly positive or slightly negative, depending on a number of factors, but particularly on the competitive environment as well as the impact of any programming disputes during the quarter.”
Doyle also addressed a key deal. AT&T is in the process of acquiring DirecTV. Regulators are reviewing the transaction, with the FCC recently stopping the clock on its review before re-starting it, leaving it on track for a decision in March. Doyle said DirecTV was confident to get deal approval, but timing was an open question.
DirecTV has been talking about a web-based video service targeting Hispanics, and Doyle told the UBS conference that it would launch
“in the next few weeks.” He said it would be priced at below $10 per month and be “primarily a VOD service” with some linear channels. “Several million homes qualify for what we’re looking for,” he said. “If it takes off, we’d look at more content for that.” Management has said it could launch similar services for other niche demos if the service gains traction.
Doyle also discussed network carriage disputes, citing sports and independent networks as the most likely channels to be dropped by DirecTV. Time Warner Cable’s L.A. Dodgers channel was “uneconomical for us,” he said. “We see very little downside [to not carrying such networks]. Churn was negligible.” He added: “I think you will see more of that.
Asked about cord cutting, Doyle said “there’s definitely an effect we’re seeing,” adding that “as programming costs get higher, some people move.”
Asked about video services offered on an over-the-top or online-only basis, Doyle said DirecTV would “like that benefit to come to the pay TV operator, too.”
The Wall Street Journal has reported that HBO could pay a price if its planned streaming service doesn’t come in partnership with DirecTV and draws many subscribers. Under HBO’s carriage contract with DirecTV, it would be penalized if it signs up more than 450,000 subscribers nationally or 300,000 in any local market, the report said. DirecTV would have the right to reduce its marketing of HBO and would immediately get the right to offer HBO’s streaming service as well, according to the Journal.
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