# DIRECTV Announces Q4-2011 and Full Year 2011 Results - Conf Call Today



## Sixto (Nov 18, 2005)

http://investor.directv.com/releaseDetail.cfm?ReleaseID=649162

Overall:EL SEGUNDO, Calif.--(BUSINESS WIRE)-- DIRECTV (NASDAQ-DTV) today reported increases in fourth quarter 2011 revenues of nearly 13% to $7.46 billion, operating profit before depreciation and amortization1 (OPBDA) of 6% to $1.78 billion and operating profit of 14% to $1.21 billion compared to last year's fourth quarter. DIRECTV also reported that fourth quarter net income increased 16% to $718 million while diluted earnings per share grew 38% to $1.02 compared with the same period last year.

"Our fourth quarter results capped off another strong year of industry leading growth as we further extended our position as the world's largest provider of pay television services with nearly 32 million subscribers in the U.S. and Latin America," said Mike White, president and CEO of DIRECTV. "Strong consumer demand for DIRECTV and SKY's premium brands drove full year gross additions in both our U.S. and Latin American businesses to all-time highs fueling the largest annual net gain in DIRECTV's history of nearly 3.7 million subscribers including Sky Mexico. The tremendous subscriber performance along with solid ARPU growth fueled an acceleration of full year consolidated revenue growth to 13% exceeding the growth rates recorded over the past two years. In addition, earnings per share grew by over 50% in 2011 due to the higher operating profit at both DIRECTV U.S. and Latin America, as well as our share repurchase program."

White concluded, "We exit 2011 on track to achieve the operating and financial priorities we outlined a year ago as part of our diversified growth strategy designed to further extend DIRECTV's leadership position as the world's most popular pay television service while maintaining industry-leading revenue and earnings growth. We believe that successful execution of these strategies along with our share repurchase plan - highlighted by the approval of an additional $6 billion buyback authorization - will create significant shareholder value as we remain on track to achieve or exceed our $5 EPS target in 2013."​
Q4 2011 - U.S.:In the quarter, DIRECTV U.S. revenues increased 9% to $6.03 billion due to ARPU growth of 4.9% coupled with the larger subscriber base. Net additions of 125,000 were lower due to an 8% decline in gross additions to 1.03 million and an increase in the average monthly churn rate to 1.52%. The ARPU increase to $101.38 was mostly due to higher NFL Sunday Ticket revenues, price increases on programming packages and leased set-top boxes, as well as higher advanced service and premium channel fees, partially offset by increased promotional offers to new and existing customers. DIRECTV U.S. ended the quarter with 19.89 million subscribers, an increase of 3% over the 19.22 million subscribers reported for the year ended December 31, 2010.

Fourth quarter OPBDA was relatively flat at $1.33 billion and OPBDA margin fell to 22.0% primarily due to higher programming costs mostly related to the new NFL Sunday Ticket contract and program supplier rate increases. Also in the quarter, operating profit grew 12% to $965 million and operating profit margin increased to 16.0% as the decline in OPBDA margin was more than offset by lower depreciation and amortization expense related to an increase in the estimated depreciable life of HD set-top boxes from three years to four years in July 2011, lower depreciation expense associated with a reduction in set-top box capital expenditures over the last several years and the completion of amortization for a subscriber-related intangible asset.​
Full Year 2011 - U.S.:In 2011, DIRECTV U.S. revenues increased 8% to $21.87 billion due to ARPU growth of 4.0% on the larger subscriber base. Net additions were relatively unchanged compared with 2010 at 662,000 as a 5% increase in gross additions to an all-time record 4.32 million was offset by a modest increase in the average monthly churn rate to 1.56% on a larger subscriber base. The ARPU increase to $93.27 was mostly due to price increases on programming packages and leased set-top boxes, higher advanced services fees, higher premium channel buy rates and an increase in NFL Sunday Ticket revenues, partially offset by more promotional offers to new and existing customers.

OPBDA in 2011 increased 1% to $5.29 billion and OPBDA margin fell to 24.2% primarily due to higher costs mostly related to program supplier rate increases and the new NFL Sunday Ticket contract. Also in 2011, operating profit grew 13% to $3.70 billion and operating profit margin increased to 16.9% as the decline in OPBDA margin was more than offset by lower depreciation and amortization expense related to an increase in the estimated depreciable life of HD set-top boxes from three years to four years, lower depreciation expense associated with a reduction in set-top box capital expenditures over the last several years and the completion of amortization for a subscriber-related intangible asset.​
Conference Call:A live webcast of DIRECTV's fourth quarter 2011 earnings and outlook call will be available on the company's website at www.directv.com/investor. The webcast will begin at 1:00 p.m. ET, today, February 16, 2012.​


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## jdh8668 (Nov 7, 2007)

Too bad they're not making any money and have to raise rates.


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## Sim-X (Sep 24, 2009)

You think they could afford to add some new HD channels.


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## ChicagoBlue (Apr 29, 2011)

jdh8668 said:


> Too bad they're not making any money and have to raise rates.


I hate it when American companies are profitable. 

You do realize they are announcing 2011 earnings which have nothing to do with their 2012 cost structure. Their programming rates are going up 10% this year, thus they are raising prices to keep their profitability margins in tact so they can do things like launch more HD and all the other complaints people have.


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## ChicagoBlue (Apr 29, 2011)

Sim-X said:


> You think they could afford to add some new HD channels.


They did. 15 of them were launched last year and they are about to add a few more in a couple of weeks according to people in the know on this board.

You realize that bandwidth is the biggest issue at DTV for HD, right? It costs lots of money to expand bandwidth (more satellites, different encoding techniques, etc). So think of it like this, they are raising your rates to keep profitability at a constant level which allows them to fund R&D and those types of things to give you the more HD you were just talking about.

Otherwise, find another provider and please let us know if those providers aren't raising prices every year for the same reason. They all are.


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## keith61 (Oct 29, 2009)

As long as it's at least BBCA HD and maybe IFC-HD and TCM-HD, they can charge as they wish.


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## Laxguy (Dec 2, 2010)

keith61 said:


> As long as it's at least BBCA HD and maybe IFC-HD and TCM-HD, they can charge as they wish.


Hah! :lol:

And :welcome_s to DBSTalk!


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## kevinturcotte (Dec 19, 2006)

ChicagoBlue said:


> They did. 15 of them were launched last year and they are about to add a few more in a couple of weeks according to people in the know on this board.
> 
> You realize that bandwidth is the biggest issue at DTV for HD, right? It costs lots of money to expand bandwidth (more satellites, different encoding techniques, etc). So think of it like this, they are raising your rates to keep profitability at a constant level which allows them to fund R&D and those types of things to give you the more HD you were just talking about.
> 
> Otherwise, find another provider and please let us know if those providers aren't raising prices every year for the same reason. They all are.


EXACTLY. Just came from cable (Time Warner) and here, they're more expensive than Directv or Dish (Even at Directv and Dish's regular, full prices), and their receivers are JUNK! Plus you have to pay $10 month lease on them compared to Directv's $6 (Even pay $10 for the first one leased, even though it's REQUIRED to get programming). PQ is all right, but Directv's is MUCH better! Not that I particularly LIKE price increases, lol, but at least with Directv (And Dish, from what I've seen), you can at least see where SOME of your money is going.


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## harsh (Jun 15, 2003)

The fact that the ARPU leaped over $100/month mark is likely to cause subscribers to take a serious look at what they're spending.

That the _average_ DIRECTV subscriber is paying $101.38 is pretty scary and really drives home the idea that they're making a whole lot of money on fees for stuff other than programming.


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## harsh (Jun 15, 2003)

ChicagoBlue said:


> Their programming rates are going up 10% this year, thus they are raising prices to keep their profitability margins in tact so they can do things like launch more HD and all the other complaints people have.


The question remains as to whether they will address these complaints or just execute more stock buy-backs until the next launches.

Given the extensive research that Sixto and his collaborators have done, it surely doesn't seem like a lot of new broad appeal HD programming is in the offing.


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## kevinturcotte (Dec 19, 2006)

harsh said:


> The fact that the ARPU leaped over $100/month mark is likely to cause subscribers to take a serious look at what they're spending.
> 
> That the _average_ DIRECTV subscriber is paying $101.38 is pretty scary and really drives home the idea that they're making a whole lot of money on fees for stuff other than programming.


The channels are gonng HAVE to do something. People are NOT going to continue to pay higher and higher fees. I don't care WHAT channels people want, most people are not going to pay too much more than $100 a month for Tv! They'll drop down to absolute basics or go with OTA and/or streaming.


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## sigma1914 (Sep 5, 2006)

harsh said:


> ...
> Given the extensive research that Sixto and his collaborators have done, it surely doesn't seem like a lot of new broad appeal HD programming is in the offing.


And what "broad appeal" HD is DirecTV lacking and not planning to add?


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## sigma1914 (Sep 5, 2006)

harsh said:


> The fact that the ARPU leaped over $100/month mark is likely to cause subscribers to take a serious look at what they're spending.
> 
> That the _average_ DIRECTV subscriber is paying $101.38 is pretty scary and really drives home the idea that they're making a whole lot of money on fees for stuff other than programming.


What? Programming is a major part of the APRU increase. Did you miss this part:


> The ARPU increase to $101.38 was mostly due to higher NFL Sunday Ticket revenues, price increases on programming packages and leased set-top boxes, as well as higher advanced service and premium channel fees, partially offset by increased promotional offers to new and existing customers.


PROGRAMMING.


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## harsh (Jun 15, 2003)

sigma1914 said:


> And what "broad appeal" HD is DirecTV lacking and not planning to add?


We'll have to wait and see. They managed to create a pretty good stir last year with several of the added channels.

I'm guessing that there will be a few HD channels that will show up on 119W this year that will fall into the category of less broad (not to mention that many can't receive them even if they did appeal).


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## sigma1914 (Sep 5, 2006)

All that "lacking HD" and they again had positive net addition in US subscribers.


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## sigma1914 (Sep 5, 2006)

harsh said:


> We'll have to wait and see. They managed to create a pretty good stir last year with several of the added channels.
> 
> I'm guessing that there will be a few HD channels that will show up on 119W this year that will fall into the category of less broad (not to mention that many can't receive them even if they did appeal).


I'm guessing, based on those much closer to the situation rather than the resident DirecTV naysayer and Dish sub, that more basic HD is coming and it won't be on the predominately Latin 119 satellite.


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## harsh (Jun 15, 2003)

sigma1914 said:


> PROGRAMMING.


You shouldn't include higher equipment lease and advanced services (DVR, WHDS) revenues under the heading of "programming". NFLST applies to somewhere downside of 10% of the subscriber base.

There is a question as to whether the ARPU is before or after promotional discounts. Many of those who have subscribed recently get two years (less in the second year) of pretty substantial discounts on their base programming along with free HD and a short run of free premium programming.


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## harsh (Jun 15, 2003)

sigma1914 said:


> I'm guessing, based on those much closer to the situation rather than the resident DirecTV naysayer and Dish sub, that more basic HD is coming and it won't be on the predominately Latin 119 satellite.


Can you offer which satellite said programming might be bounced off of? The physics of satellite TV broadcasting is largely independent of what TV provider you subscribe to.


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## sigma1914 (Sep 5, 2006)

harsh said:


> You shouldn't include higher equipment lease and advanced services (DVR, WHDS) revenues under the heading of "programming". NFLST applies to somewhere downside of 10% of the subscriber base.
> 
> There is a question as to whether the ARPU is before or after promotional discounts. Many of those who have subscribed recently get two years (less in the second year) of pretty substantial discounts on their base programming along with free HD and a short run of free premium programming.


I quoted the whole sentence, but programming was a major player in the higher APRU. Why do you ignore that fact?

It should also be noted your $100+ APRU is only for the 4th quarter, which is when the NFL, NHL, & NBA are going strong...again, PROGRAMMING. The APRU for the year was still below $100.


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## sigma1914 (Sep 5, 2006)

harsh said:


> Can you offer which satellite said programming might be bounced off of? The physics of satellite TV broadcasting is largely independent of what TV provider you subscribe to.


Let's use common sense. Considering a large amount of subs have a 3 LNB dish, why would DirecTV add national HD to it?


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## keith61 (Oct 29, 2009)

Laxguy said:


> Hah! :lol:
> 
> And :welcome_s to DBSTalk!


Oh, think I forgot to add sarcasm here.


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## AquiringSat (Jan 7, 2012)

I for one, am happy to see DirecTV doing well! I will happily pay money to them, because they offer what I want, Sports! And for the record, it's a heck of a lot cheaper than what I was paying the [cable company] 2 months ago (even after my first year is up, it will be cheaper)

They are running a smart business, they know what the majority of the people want, and they deliver it.

Mod Edit in red.


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## Laxguy (Dec 2, 2010)

keith61 said:


> Oh, think I forgot to add sarcasm here.


OK, but now I am confused! I meant no sarcasm in my reply.

I do guess you are a returnee with a new handle?


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## mkdtv21 (May 27, 2007)

I was reading the transcript and it said somewhere in there that on March 29 will be investor day. But I was wondering if that applies only to Directv Latin America or the actual USA.


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## Satelliteracer (Dec 6, 2006)

harsh said:


> We'll have to wait and see. They managed to create a pretty good stir last year with several of the added channels.
> 
> I'm guessing that there will be a few HD channels that will show up on 119W this year that will fall into the category of less broad (not to mention that many can't receive them even if they did appeal).


More HD is coming and it's not on 119


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## kevinturcotte (Dec 19, 2006)

Satelliteracer said:


> More HD is coming and it's not on 119


I can't picture many more (If any) English language channels being on 119.


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## TBoneit (Jul 27, 2006)

sigma1914 said:


> And what "broad appeal" HD is DirecTV lacking and not planning to add?


I'm going to say Epix 1, 2, & 3

AMC is now HD
Don't recall if FMC or TCM are HD
The ever requested BBCA HD

No way to know if they are really planning to add them as saying we want to add so and so channel before it is a signed deal is a great way to drive the price up.

Cheers


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## tonyd79 (Jul 24, 2006)

harsh said:


> The fact that the ARPU leaped over $100/month mark is likely to cause subscribers to take a serious look at what they're spending.
> 
> That the _average_ DIRECTV subscriber is paying $101.38 is pretty scary and really drives home the idea that they're making a whole lot of money on fees for stuff other than programming.


Isn't this like the 13th straight quarter you have pretty much predicted doom and gloom for DirecTV?

And they keep growing.

Guess they have a better handle on their numbers than you do.

BTW, the average customer is probably nowhere near a basic customer. I think SatRacer has said that the majority of customers have premiums of some type (movies and/or sports). Sports (something your provider has little of) will drive the cost to the average sub way up.


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## sigma1914 (Sep 5, 2006)

TBoneit said:


> I'm going to say Epix 1, 2, & 3
> 
> AMC is now HD
> Don't recall if FMC or TCM are HD
> ...


None of those are "broad appeal" channels; none are in the top 40 for total daily ratings.


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## harsh (Jun 15, 2003)

tonyd79 said:


> Isn't this like the 13th straight quarter you have pretty much predicted doom and gloom for DirecTV?


I'm not predicting anything. I'm simply offering up numbers that may or may not (typically not) support the claims of joy-joy from the apologists.


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## Laxguy (Dec 2, 2010)

harsh said:


> I'm not predicting anything. I'm simply offering up numbers that may or may not (typically not) support the claims of joy-joy from the apologists.


But why do you feel the need to rain on anyone's parade? Just trying to rein in things? Or reign over a forum? 

True apologists may need slapping hard from time to time, but really.........


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## alirelan720 (Feb 11, 2012)

ChicagoBlue said:


> I hate it when American companies are profitable.
> 
> You do realize they are announcing 2011 earnings which have nothing to do with their 2012 cost structure. Their programming rates are going up 10% this year, thus they are raising prices to keep their profitability margins in tact so they can do things like launch more HD and all the other complaints people have.


They rose prices by 4% compared to Dish's increase of 10-15% last year, I'd say they are doing better than most companies at raising prices.


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## alirelan720 (Feb 11, 2012)

Sim-X said:


> You think they could afford to add some new HD channels.


Directv has triple the amount of HD channels Dish has..:nono2:


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## fireponcoal (Sep 26, 2009)

Direct TV made money! I'll drink to that. Wait, why would I drink to that?


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## Gloria_Chavez (Aug 11, 2008)

alirelan720 said:


> They rose prices by 4% compared to Dish's increase of 10-15% last year, I'd say they are doing better than most companies at raising prices.


Actually, Dish's rates rose 3.5%, 3Q11/3Q10. Dish will announce 4Q11/4Q10 ARPU hike this week.

----------------------------
http://seekingalpha.com/article/305844-dish-misses-subscriber-loss-soars

Average monthly subscriber churn rate in the third quarter of 2011 was 1.83% compared with 1.98% in the year-ago quarter. Average revenue per user (ARPU) in the reported quarter was $76.99 compared with $74.36 in the prior-year quarter. Average subscriber acquisition cost in the last quarter was $789 compared with $795 in prior-year quarter.
----------------------------

During 4Q11, DTV's ARPU increased 4.9%.


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## RACJ2 (Aug 2, 2008)

ChicagoBlue said:


> ... You do realize they are announcing 2011 earnings which have nothing to do with their 2012 cost structure. Their programming rates are going up 10% this year, thus they are raising prices to keep their profitability margins in tact so they can do things like launch more HD and all the other complaints people have.


Somebody mentions this fact every year. Obviously they raise the rates enough in early 2011 to more then offset the higher costs and once again attain record profits in 2011. So now they raised them again in 2012, so that next years profit will beat this years.

With that said, I'm a happy customer who is glad they take care of good customers, by granting discounts, free upgrades, etc that are requested. Obviously, those that are willing to settle for paying list price are contributing to the record profits. If you are one of them, you should be proud of your accomplishments.


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## inkahauts (Nov 13, 2006)

kevinturcotte said:


> The channels are gonng HAVE to do something. People are NOT going to continue to pay higher and higher fees. I don't care WHAT channels people want, most people are not going to pay too much more than $100 a month for Tv! They'll drop down to absolute basics or go with OTA and/or streaming.


I'd say that's exactly why they have added the entertainment package...


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## inkahauts (Nov 13, 2006)

harsh said:


> Can you offer which satellite said programming might be bounced off of? The physics of satellite TV broadcasting is largely independent of what TV provider you subscribe to.


They still have room on the other sats for more hd. 10 to 12 channels, maybe even more depending on a few other things.

No one can expect any regular hd channels to ever show up on 119 again, it would go against everything they have been doing for the last 4 years, and all their plans they have stated going forward, making that idea illogical. Of course, illogical is what you seem to specialize in when it comes to predicting anything that has to do with Directv and what is happening with them.... :nono2:


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## Skiman (Nov 20, 2008)

fireponcoal said:


> Direct TV made money! I'll drink to that. Wait, why would I drink to that?


You're right - why would we want any American-based company to make money? They should all be losing money by giving away everything for free... that'll help the economy and prevent job losses,. :nono2:


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## Carolina (Jan 20, 2012)

I'm all for DirecTV and other American Companies like GM making money  And I will continue to stick with the companies that give me what I want be it in the area of TV or cars!


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## P Smith (Jul 25, 2002)

Satelliteracer said:


> More HD is coming and it's not on 119


It wouldn't be a such secret as soon the channels will appear as test channels in system tables. :grin:


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## YakeVlad (Aug 12, 2011)

Here goes my shot at tackling the 800lbs gorilla in the thread...

There's justifiable frustration and anger being voiced by some regarding D*'s latest earnings with others voicing good points on the other side of the debate. Yes, D* is a publicly traded corporation, and yes the board has to provide continued shareholder value to keep their jobs. Yes, D* has a right to seek profits. But, there's is a line of reason to be recognized as well. Announcing record profits and earnings per share on the tail of rate increases to subscribers is a slap in the face to many people. It shows that not only did you cover the increase in programming costs, but that you managed to make even more money than before despite them. And when the justification for those same rate increases was "increased costs of programming" it becomes clear that the decision had little to do with maintaining the health of the company but more to do with passing the burden down to the customer while making the shareholders even more money. Now pile on top of that the fact that we're still mired in the worst economic state since the Great Depression. It paints a very unflattering picture of D* being an uncaring, profiteering company out of touch with its customers and which only cares about how rich it can make its shareholders. 

From the other side of the fence D* did an excellent job of increasing profits through a higher rate of monies generated from premium services like movie packages, pay-per-view, sports packages, etc. Clearly rate increases were not the only source of success. Congratulations is in order to D* for that as well as managing to defy the industry-wide pattern of subscriber losses. They absolutely deserve to reap the rewards of those achievements.

A much higher percentage of the subscriber population is hurting financially right now and has been for the last few years. Every increase in costs adds to that pain, especially when it comes from a company which is experiencing a growing wealth of fortunes despite a tough economic climate. This isn't a case of the company making an adjustment to maintain the financial status quo. It's easy, and to a degree justifiable, for someone in a tough spot to see this as another example of corporate greed and excess. Yes, we all have the choice to drop to a lower level package, but D* also had the choice to take the high road by absorbing some costs instead of increasing rates and recognizing the hardships being borne by its customers. Yes, other providers are increasing their rates or charge more for their services than D*, but at the same time those companies are losing money or are seeing lower profits, unlike is the case with D*. Just because the other kids on the block are doing something doesn't mean you have to as well. In the words that I'm sure we've all heard from our parents at one point in our lives, "so if your friends all jumped off a cliff, would you do it too?" 

These aren't normal economic times, yet D* continues to act like they are. Isn't it time for a little common sense and some compassion towards your "valued customers"? I just wonder how many more customers, and greater profits, D* might have gained from NOT raising rates and running a marketing campaign promoting how they were better than their competition by bucking the trend. I remember the days when one of D*'s biggest selling points was how they were different from cable and didn't raise rates every year. What happened to THAT DirecTV?


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## Hoosier205 (Sep 3, 2007)

YakeVlad said:


> There's justifiable frustration and anger being voiced by some regarding D*'s latest earnings


No there is not. DirecTV is in the business of making money by selling a product and service. They are doing exactly what they should be doing. If consumers are unhappy with that, they have other options. Of course, the other options on the table operate by the same basic and fully reasonable principals. If you don't like they way they operate or how much charge versus how much they make...terminate your service and move on.



YakeVlad said:


> ...which only cares about how rich it can make its shareholders.


Maximizing value and profits for its shareholders is, at the end of the day, the point. That is who the CEO works for. DirecTV isn't a non-profit working for the betterment of the world. They sell a service that is in demand for the purpose of profiting from it. The one and only reason why a television provider should maintain or lower rates is if it has trouble retaining and attracting customers. Otherwise, it is their responsibility to maximize profits and opportunities on behalf of the shareholders.

I cannot believe how often this must be explained to folks.


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## P Smith (Jul 25, 2002)

I don't like such military style to review business practice, Mr Hoosier. Please keep it for your subordinates.

Vlad's analytic is much more reasonable.


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## Hoosier205 (Sep 3, 2007)

"P Smith" said:


> I don't like such military style to review business practice, Mr Hoosier. Please keep it for your subordinates.
> 
> Vlad's analytic is much more reasonable.


...what? Some issues come down to differing opinions. This is not one of those issues. This is how business and our economy work.


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## mreposter (Jul 29, 2006)

The satellite tv business is doomed! doomed! the analysts say.

I've heard/read this from other business analysts, that Directv/Dish ultimately will lose the battle against the triple-play of cable/fiber and that within the next 3-5 years they'll be failing businesses. I don't necessarily agree with it, but at some point the internet will become just as important a delivery mechanism for entertainment as traditional cable/satellite.


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## Sixto (Nov 18, 2005)

Welcome to America in 2012. 

Most every organization that I interact with is run the same way these days.

Quarterly profits are a key priority, most would like to keep their jobs, and there's always a key focus on any opportunity to increase revenues and/or decrease costs, while also providing high customer satisfaction.

There's also survival of the fittest, so there's also a balancing act as to what the market will bear, and keeping a very key focus on your market and the competition within your market.

Simple as that. 

Same everywhere, whether it's the TV business or any other industry.


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## mashandhogan (Dec 21, 2010)

I think I need to get some DTV stock:lol:


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## harsh (Jun 15, 2003)

mreposter said:


> I've heard/read this from other business analysts, that Directv/Dish ultimately will lose the battle against the triple-play of cable/fiber and that within the next 3-5 years they'll be failing businesses. I don't necessarily agree with it, but at some point the internet will become just as important a delivery mechanism for entertainment as traditional cable/satellite.


DIRECTV stands to sustain the most damage from this theory but to date they seem to have escaped largely unscathed. If you're a trader, no big deal, but if your a buy-and-hold type, I'd still be wary.

The alliances DISH had should protect them pretty well for a while. See more at Wild Blue's "exede" Internet.


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## YakeVlad (Aug 12, 2011)

Hoosier205 said:


> No there is not. DirecTV is in the business of making money by selling a product and service. They are doing exactly what they should be doing. If consumers are unhappy with that, they have other options. Of course, the other options on the table operate by the same basic and fully reasonable principals. If you don't like they way they operate or how much charge versus how much they make...terminate your service and move on.


So...we as customers should just take it up the arse and tell them thank you can I have more please? I'm well aware that DirecTV is a business and has the right to seek profits. In fact I said as much in my initial post. But raking customers for every penny you can squeeze out of them is not the only way to accomplish that goal. Customer retention, customer additions, new services, reducing costs to improve margins on the products and services you offer, streamlining processes to make them more efficient and thus less costly, up-selling customers on premium services, effective marketing campaigns, there are dozens of ways to improve shareholder value in a company without raising the rates on the base product or service being offered. DirecTV was as stated in their report quite successful in a number of these areas.

Relying too heavily on data from statistics and charts on where the threshold between price charged and number of customers to reach maximum profitability as the determining factor for how you operate your business is cold and lazy. Which is the tone I get from your comments. It's the "let's do it because the computer says we should mentality" with hazardous disregard for whether it's the best solution or the other impacts it will have. It's also the mentality that has led to the demise of many a once successful business.

I'm saddened by how accurately your comments represent the thinking of too many businesses today. The mantra in business used to be that the customer was right and that there was as much value placed on keeping customers and doing the "right" thing. Today the mantra seems to be more how much can we bleed every customer for, pass down any cost increases to our customers, the shareholders are right and screw the customers, if they don't like it they can go somewhere else and we'll just replace them with another customer.



Hoosier205 said:


> Maximizing value and profits for its shareholders is, at the end of the day, the point. That is who the CEO works for. DirecTV isn't a non-profit working for the betterment of the world. They sell a service that is in demand for the purpose of profiting from it. The one and only reason why a television provider should maintain or lower rates is if it has trouble retaining and attracting customers. Otherwise, it is their responsibility to maximize profits and opportunities on behalf of the shareholders.
> 
> I cannot believe how often this must be explained to folks.


I'm keenly aware of who are the bosses of the chairmen and executives at publicly owned companies. I also know that DirecTV is not running a charity. But, I strongly disagree with your interpretation of the responsibility to maximize profits and opportunities for the shareholders. The responsibility is to properly manage the balance between maintaining and increasing shareholder "value" and the long-term health and viability of the corporation. The mentality that if I make my shareholders $1 today I have to make them $2 tomorrow is reckless and unsustainable. Many a board has fallen victim to the shortsightedness of your interpretation and led their businesses down the path to ruin because they focused too much on maximizing profits in the short-term without enough regard for how those decisions will impact the business in a wider scope. Decisions which may benefit the shareholders this quarter or even over the next couple of quarters can have disasterous consequences for the business as soon as a year later and expand far beyond the financials. CEO's and other executives at corporations have been fired despite delivering good results for the shareholders because they failed to properly manage the operation of the business. While the shareholders may be their bosses, customers make the business viable.

DirecTV used to be focused on providing its *customers* the greatest value for the services offered compared to its competitors and successfully marketed it like no tomorrow. It offered as many channels as other providers for significantly less cost. It's that value which led DirecTV from being a small niche provider to having in excess of 10 million subscribers. Somewhere along the path of its sales from Hughes to News Corp to Liberty Media, DirecTV lost sight of their roots. Let's look at the television provider market over the past year. All of the other providers are increasing rates and bleeding customers. Meanwhile DirecTV is defying the trend of customer losses and actually growing it's subscriber base. DirecTV could build upon that momentum by not increasing rates, creating a gap in cost for its services compared to the competition, and attracting even more customers while reducing subscriber churn. DirecTV as proven by the 4th quarter financials is making a very healthy profit and continues to contribute to its increase by higher average per subscriber purchases. So, it could be argued that DirecTV could profit *more* from keeping rates at 2011 levels, allowing accelerated customer gains to offset the increased costs absorbed, and focusing its attention to continuing to increase average per subscriber purchases. That would raise profits AND the health of the corporation resulting in increased shareholder value from both. More to the point, your comment about all the other providers increasing their rates, why should a successful DirecTV engage in the same practices as their unsuccessful competitors? If you want to be successful you follow the practices of other successful people or businesses, not the ones which are failing.

I'll end on this thought...Corporations don't always base their decisions on cold numbers and profits. Look at how many provide their products free of charge in cases of disaster. Others have rolled back prices or absorbed cost increases during this "Great Recession" due to financial hardships already being born by their customers. These gestures come at the expense of the businesses profits in the short-term, but the positive image the business receives from it, the increased customer loyalty it creates, and the marketing buzz that it generates can lead to more customers and greater profits in the end.


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## Hoosier205 (Sep 3, 2007)

"YakeVlad" said:


> So...we as customers should just take it up the arse and tell them thank you can I have more please? I'm well aware that DirecTV is a business and has the right to seek profits. In fact I said as much in my initial post. But raking customers for every penny you can squeeze out of them is not the only way to accomplish that goal. Customer retention, customer additions, new services, reducing costs to improve margins on the products and services you offer, streamlining processes to make them more efficient and thus less costly, up-selling customers on premium services, effective marketing campaigns, there are dozens of ways to improve shareholder value in a company without raising the rates on the base product or service being offered. DirecTV was as stated in their report quite successful in a number of these areas.
> 
> Relying too heavily on data from statistics and charts on where the threshold between price charged and number of customers to reach maximum profitability as the determining factor for how you operate your business is cold and lazy. Which is the tone I get from your comments. It's the "let's do it because the computer says we should mentality" with hazardous disregard for whether it's the best solution or the other impacts it will have. It's also the mentality that has led to the demise of many a once successful business.
> 
> ...


I don't see the point of your post. I told you how it is. You're going on about how you wish it was. Fantasy vs reality. It's pointless. Humor yourself if you wish and tell an incredibly successful company that happen to be running their business properly...that they are doing it all wrong. Have fun with those delusions. Here they are dealing with ever increasing retrans costs, among other variables, and you're telling them to do nothing. It's just so silly and ludicrous.

None of this matters though. They know what they are doing. You...obviously...do not.


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## YakeVlad (Aug 12, 2011)

Hoosier205 said:


> I don't see the point of your post. I told you how it is. You're going on about how you wish it was. Fantasy vs reality. It's pointless. Humor yourself if you wish and tell an incredibly successful company that happen to be running their business properly...that they are doing it all wrong. Have fun with those delusions. Here they are dealing with ever increasing retrans costs, among other variables, and you're telling them to do nothing. It's just so silly and ludicrous.
> 
> None of this matters though. They know what they are doing. You...obviously...do not.


lol...you make it sound like I'm out on at crusade. If we go back to my initial post I discussed both sides of the debate here in the thread. My posts after that were focused on addressing the responses which came after and solely focused one side, so my responses we addressed as such. I know the reality of today's corporate business world and that it won't change unless something more profitable is devised. However, the attitude that because something doesn't represent how things are done today makes it pure fantasy and delusional is hilarious. Devising new approaches to business is how new business models come about, how innovation in business takes place, and how established businesses adapt to avoid going the way of the Dodo. If what you expressed was our reality there wouldn't be smartphones or computers or innovative companies like Amazon, we'd all still be living in caves. We have flourished on the backs of people whom you would describe as wishers of fantasy and delusional because they had the foresight and skill to invent new products and evolve the way business was done.

I'm glad that DirecTV continues to be successful and provides us with such a quality product/service. I wouldn't have been a customer of theirs for over 10 years and continue to be if I was unsatisfied. I'm glad to hear that they are continuing to grow in a market in which most other companies are contracting. They're obviously doing things right. Maybe there's even more successful strategies they could...Oops there I go again drifting into my delusions...rofl :lol:


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## Upstream (Jul 4, 2006)

YakeVlad -- I understand your frustration, but I think it is somewhat misplaced. Certainly DirecTV is in business to make money, but they do that by selling services at a fair value to customers. If customers do not think the price is fair, or if they think the service is subpar, or technology is not improving properly, or that support is lacking, etc., then customers can take their business elsewhere. If enough customers do that, then DirecTV will have failed at their objective to make money.

Right now, DirecTV's subscriber base is growing. But that does not mean they are keeping all existing customers and adding new ones. It just means they are adding new customers faster than they lose existing customers.

Over 18% (almost one out of every five) DirecTV subscribers cancel their service every year. That works out to an average of almost 9940 cancellations every single day.

If you do not believe that DirecTV charges you a fair price for the services they provide, you could add your name to the list of cancellations. You have lots of options: Dish, cable, antenna, internet, Netflix, don't watch TV, etc.


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## YakeVlad (Aug 12, 2011)

It's all good. I started off analyzing both sides of the debate with no vested interest on either side and wound up just discussing one side as the conversation pushed things in that direction. I'm quite happy with my DirecTV service and have no interest in looking elsewhere. 

My apologies to Sixto for straying a bit off topic.


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## georule (Mar 31, 2010)

D* seems to be doing pretty well to me. Look at most of the cable companies, and you find those that appear to be doing well are really living off their increase in internet and phone, not video.

D* has to be more nimble than them, because D*'s offerings are more limited. Latin America is certainly helping D* a lot, of course. That's really not bad for us tho (at least so far), as the economies of scale in various administrative and tech areas still benefit US customers.

There are 4 more HD channels I'd really like to have. Otoh, when I came to D* three years ago, it was because there were about 30 more HD channels I could get from D* than I had already.  At that time I didn't even realize how much more I'd love the DVR versus cable fare. I'll live (and still plug away at encouraging D* to add my channels).


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## eyefrickinLovehousemusic (Dec 12, 2010)

Well, it's nice to see Directv made so much profit while they rob and steal from their technicians and make them work for below minimum wage a lot of the time! This is why people turn to unions!


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## Scott Kocourek (Jun 13, 2009)

eyefrickinLovehousemusic said:


> Well, it's nice to see Directv made so much profit while they rob and steal from their technicians and make them work for below minimum wage a lot of the time! This is why people turn to unions!


Yes, I'm quite sure technicians pay would be much higher had they shown a loss.


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## Laxguy (Dec 2, 2010)

eyefrickinLovehousemusic said:


> Well, it's nice to see Directv made so much profit while they rob and steal from their technicians and make them work for below minimum wage a lot of the time! This is why people turn to unions!


We live in a free economy. No one "makes" you work for wages less than you can get elsewhere.....


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## inkahauts (Nov 13, 2006)

"eyefrickinLovehousemusic" said:


> Well, it's nice to see Directv made so much profit while they rob and steal from their technicians and make them work for below minimum wage a lot of the time! This is why people turn to unions!


I'd love to see proof of them forcing you to work for less than minimum wage. Talk about a major lawsuit.


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