DirecTV to Launch Web-Based Video Service for Hispanics This Year

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CEO Mike White also discusses the planned NFL Sunday Ticket, AT&T deals and how to serve cord-cutters

Mike White, CEO of pay TV giant DirecTV, said Friday that the company would launch an online video service targeting Hispanics, and he was "highly confident" to have a finalized NFL Sunday Ticket renewal deal by year-end.

"We don't have anything to announce today," he told the Goldman Sachs Communacopia conference in New York in a session that was webcast. 

Sports Business Journal recently reported that the satellite TV giant and the league have reached a broad agreement on pricing and duration of an extension. The report said the average annual rights fee will rise from $1 billion under the current four-year contract, which is set to end after this coming season, to between $1.3 billion and $1.4 billion. The new deal is expected to run through 2021 or 2022.

White said Friday that NFL Sunday Ticket is DirecTV's answer to cable networks' original content. "I'm not trying to be HBO," which does it way better than DirecTV could ever do, he said. Other originals on DirecTV are mostly niche content, he said. Offering such programming over mobile broadband could give AT&T monetization opportunities, he added. 

He also reiterated that DirecTV would launch a lower-priced broadband-delivered niche video product tailored to Hispanics, which the company has hinted at in the past. He announced that it would launch later this year, without providing further details. It is expected to offer fewer channels and niche programming for a smaller price than pay TV bundles.

Signaling that more such niche services could be launched, he compared the idea behind the product to "specialty magazines."

Hispanic media giant Univision Communications will be a supplier of content to the service, Reuters reported on Thursday. White said similar targeted packages at smaller prices could follow.

White on Friday also discussed the regulatory review process of the planned AT&T acquisition of the pay TV company and cord-cutting after the conference had seen a presentation of the latest research on cord-cutting late Thursday.

"It's all going as we expected," he said about the regulatory review. "It's a lot of work, a lot of lawyers, a lot of staff." He said the review is "thorough," and "the timetable is pretty much anybody's guess."

He then added though: "We're optimistic" that the deal will close "somewhere in the first half of next year," with early April being his best guess. White said he would ideally like to see the review finish by the end of the first or early in the second quarter.

He argued several times that the deal was a combination of two complementary businesses. "They look at each deal in its own right," White said when asked if the review of Comcast's planned acquisition of Time Warner Cable was playing into the DirecTV-AT&T review. But he did acknowledge that with two big deals being in review at the same time, there may be "some considerations" given by regulators to the other deal.

Meanwhile, he said that there hasn't been a mass exodus of cord-cutters leaving pay TV behind yet, but his team has looked to service price-sensitive customers and millennials.

"There are a lot of them in this country," he said regarding price-conscious subscribers who are not willing to pay more than $50-$75 per month. "That's a huge challenge for our industry. I've been trying to figure out how to service a more price-conscious customer."

He at one point, he suggested that a cord-cutter package could be a product from AT&T coupled with pay TV service but no broadband in the home that the merged companies could sell. Or they could offer AT&T broadband and an over-the-top video service. But he told the conference that the companies will explore options after the deal closes. "I can't wait to sell a bundle," he said.  

Asked about Dish Network's plans to launch a virtual pay TV service, White said, "We still have to see how many channels Dish is getting." He added that he wasn't sure that a bundle offering ESPN and ABC Family, among some other networks, is a very attractive offer for consumers. 

Twitter: @georgszalai