# DirecTV 1st Qtr 2009 Results and Call - Added 460K subs



## bonscott87 (Jan 21, 2003)

I searched and didn't find a thread yet.

The conference call is this afternoon at 2pm eastern. 
http://dtv.client.shareholder.com/

I hope to be able to blog this, so long as I don't have to do any actual "work" today.

DirecTV has released their results found here:
http://investor.directv.com/releasedetail.cfm?ReleaseID=382409

Highlights:
** DIRECTV U.S. Net Subscriber Additions Up 67% to 460,000
* DIRECTV U.S. Passes 18 Million Subscriber Mark Driven by 22% Increase in Gross Additions and the Lowest Monthly Churn Rate in 10 Years of 1.33%*


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## bonscott87 (Jan 21, 2003)

I am floored by the net addition of nearly half a million subs *in one quarter* and *after* Sunday Ticket is over. Amazing.
And churn is at record low numbers, continuing to go down from last quarter.

I think this also indicates that the HR2x rollout isn't as bad now as some make it out (before you flame, I'm talking in general terms across the subscriber base) because now we've had 2 full quarters during which the initial HR2x 2 year commitmnets are up and yet subs are not leaving in droves. Churn is actually *down* and new subs are way up.

Also FIOS and Uverse rollouts continue to not eat into DirecTV but obviously into cable and Dish (which I wouldn't be surprised have another net sub loss).


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## lee78221 (Sep 25, 2007)

bonscott87 said:


> I am floored by the net addition of nearly half a million subs *in one quarter* and *after* Sunday Ticket is over. Amazing.
> And churn is at record low numbers, continuing to go down from last quarter..


+1 Wow, Great Job DirecTV.

Wondering how Dishs 1st Qtr is going to be like.:lol:


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## harsh (Jun 15, 2003)

The new subscriber numbers are excellent.

Below numbers are compared to Q1 2008:

SAC is up 21%!

The ARPU (average monthly bill) is over $80/month.

Operating Expenses are up 13%.

Operating Profit is down 35%.


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## Steve (Aug 22, 2006)

bonscott87 said:


> I think this also indicates that the HR2x rollout isn't as bad now as some make it out (before you flame, I'm talking in general terms across the subscriber base) because now we've had 2 full quarters during which the initial HR2x 2 year commitmnets are up and yet subs are not leaving in droves. Churn is actually *down* and new subs are way up.


Good observation. Chase will probably mention the % of D* HD households at some point in the call, but I wonder if he'll further break down the % of HD DVR's deployed? I'm guessing the average HD DVR household has 2, so the # of HR's in the field _could_ be in the 10,000,000 to 15,000,000 range by now. /steve


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## hdtvfan0001 (Jul 28, 2004)

Amazing numbers, and likely beyond their forecasts.

Wondering out loud - are these alot of defectors from Dish or other service.

When Echostar has their results, it will be interesting to see if they continue their downward spiral in subscribers - not to criticize - but this has been a trend for some time there. Perhaps the market is doing its own "consolidation" to a single DBS provider.


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## Hutchinshouse (Sep 28, 2006)

bonscott87 said:


> I am floored by the net addition of nearly half a million subs *in one quarter* and *after* Sunday Ticket is over. Amazing.
> And churn is at record low numbers, continuing to go down from last quarter.
> 
> I think this also indicates that the HR2x rollout isn't as bad now as some make it out (before you flame, I'm talking in general terms across the subscriber base) because now we've had 2 full quarters during which the initial HR2x 2 year commitmnets are up and yet subs are not leaving in droves. Churn is actually *down* and new subs are way up.
> ...


Source?

Verizon added 299,000 FiOS TV subscribers in Q1. Everyone always says FiOS is not offered everywhere. For not being offered everywhere, 300k new subscribers in Q1 sounds pretty impressive to me. Link: http://money.cnn.com/news/newsfeeds...growth_accelerates_wireless_solid_2009_4.html


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## hdtvfan0001 (Jul 28, 2004)

Hutchinshouse said:


> Source?
> 
> Verizon added 299,000 FiOS TV subscribers in Q1. Everyone always says FiOS is not offered everywhere. For not being offered everywhere, 300k new subscribers in Q1 sounds pretty impressive to me. Link: http://money.cnn.com/news/newsfeeds...growth_accelerates_wireless_solid_2009_4.html


I'm not sure where FIOS is getting their new customers....but from firsthand marketing efforts that I saw the past 60 days in 4 NorthEast states...its clear they are targeting cable (especially Comcast) conversions in their ads.

As for the DirecTV growth numbers....I suspect its a market-driven consolidation to some degree, coupled with their aggresive $29.99 "special rate" for new subscribers ad campaign and re-addition of AT&T co-marketing.


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## jpl (Jul 9, 2006)

hdtvfan0001 said:


> I'm not sure where FIOS is getting their new customers....but from firsthand marketing efforts that I saw the past 60 days in 4 NorthEast states...its clear they are targeting cable (especially Comcast) conversions in their ads.
> 
> As for the DirecTV growth numbers....I suspect its a market-driven consolidation to some degree, coupled with their aggresive $29.99 "special rate" for new subscribers ad campaign.


I think that's exactly right. Their entire ad campaign took a page from the Apple Mac ads where you have one guy representing FiOS, and the other representing Cable. It's clear that Verizon's aim is primarily at existing cable customers.

As for the DirecTV growth numbers, all I can say is 'wow!' That really is impressive. I figured that they'd have a good quarter, but that really is astounding.

Edit - as for why the accelerated growth (they did great the prior two quarters, but this blows that out of the water), I'd have to guess that it can partly be attributed to their teaming up with AT&T. Which makes me really curious as to how Dish did this past quarter.


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## Stuart Sweet (Jun 19, 2006)

harsh said:


> The new subscriber numbers are excellent.
> 
> Below numbers are compared to Q1 2008:
> 
> ...


Numbers like that are best taken in context. I'm sure there are many, many large corporations in the US that would salivate over the ability to report a profit at all. In the meantime, DIRECTV has added something like a million subscribers in the last 12 months. When that is compared to the number of new customers who've walked into a GM dealership for the first time in the last 12 months... I'm just saying. I wonder if GM is still glad it no longer has an affiliation with DIRECTV (through one-time parent Hughes).


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## jpl (Jul 9, 2006)

Stuart Sweet said:


> Numbers like that are best taken in context. I'm sure there are many, many large corporations in the US that would salivate over the ability to report a profit at all. In the meantime, DIRECTV has added something like a million subscribers in the last 12 months. When that is compared to the number of new customers who've walked into a GM dealership for the first time in the last 12 months... I'm just saying. I wonder if GM is still glad it no longer has an affiliation with DIRECTV (through one-time parent Hughes).


You ain't kidding - not to get OT, but my wife and I were recently shopping for a new car. ALL dealerships are now ghosttowns - you can't walk 5 feet from your car before at least one salesman descends on you. But nowhere did I see the level of desperation that was palpable at the local Saturn dealership. We test drove the Outlook (one of their cross-overs), and the one that we were looking at was a 2008 left-over. Yep, they still had a new 2008 on the lot, just a few months before the 2010s will be hitting the lots.

These numbers, by any measure, are just darn impressive on DirecTV's part, and I give them major kudos for it.


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## lee78221 (Sep 25, 2007)

Stuart Sweet said:


> I wonder if GM is still glad it no longer has an affiliation with DIRECTV (through one-time parent Hughes).


The same could be said for Rupert Murdoch. What's that he call DirecTV again? A Turd bird.:lol:


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## Piratefan98 (Mar 11, 2008)

Hard to argue with results .... this is a VERY successful company. I'm glad to be a subscriber (but I'll still be *****ing about new HD, PBS, bugs in the new Scoreguide, etc.) :lol:

Truly, they are the best provider on earth, but "best" doesn't mean perfect. Always room for improvement.

Jeff


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## DCDeac (Aug 26, 2005)

Well, here's how they got me. Had Dish a while back, loved it. Switched to Comcast when they offered a crazy deal, hated it. 

Decided to switch again, and the perfect storm of changes occurred for me to choose DirecTV. 

1) Prices came down. Getting started with HD DVR's on DirecTV used to be WAY more expensive than with Dish. Now it's about the same. 

2) Connectivity Issues. SWM is a big help for prewired houses. Almost impossible to do before, now not a big deal. 

3) Prices came down. Deals are for 12 months, not 6. Long term cost dropped enough that even if Comcast offered a deal, it wouldn't be significant enough to prevent getting DirecTV. 

4) HD quality improved, programming choices continue to be great, especially sports-wise. 

5) Did I mention prices came down? (Oh, and no FIOS in my area. Duh.)


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## bonscott87 (Jan 21, 2003)

Hutchinshouse said:


> Source?
> 
> Verizon added 299,000 FiOS TV subscribers in Q1. Everyone always says FiOS is not offered everywhere. For not being offered everywhere, 300k new subscribers in Q1 sounds pretty impressive to me. Link: http://money.cnn.com/news/newsfeeds...growth_accelerates_wireless_solid_2009_4.html


I think you mistake what I said.
As with 4th quarter last year, DirecTV, FIOS & AT&T all grew by pretty good numbers. Dish and cable all lost subs.

Thus, FIOS and AT&T are eating away at Dish and cable subs a lot more then DirecTV. At the least DirecTV is replacing them with even more newbies coming from Dish and cable.

My point is that FIOS and AT&T's rapid rise is *not* at the expense of DirecTV but everyone else. DirecTV has remained strong despite the strong competition.


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## Hutchinshouse (Sep 28, 2006)

bonscott87 said:


> I think you mistake what I said.
> As with 4th quarter last year, DirecTV, FIOS & AT&T all grew by pretty good numbers. Dish and cable all lost subs.
> 
> Thus, FIOS and AT&T are eating away at Dish and cable subs a lot more then DirecTV. At the least DirecTV is replacing them with even more newbies coming from Dish and cable.
> ...


I hear ya. My point was DIRECTV's numbers would have been even higher if FiOS was out of the picture. So, basically FiOS did "eat" at DIRECTV's numbers. And I'm sure likewise with FiOS. I'm sure people dropped FiOS for DIRECTV. Competition is great!


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## Newshawk (Sep 3, 2004)

Piratefan98 said:


> Hard to argue with results .... this is a VERY successful company. I'm glad to be a subscriber (but I'll still be *****ing about new HD, PBS, bugs in the new Scoreguide, etc.) :lol:
> 
> Truly, they are the best provider on earth, but "best" doesn't mean perfect. Always room for improvement.
> 
> Jeff


That's OK, Jeff. You're part of the family, and there's always some contention in ANY family-but we're still family!


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## ansky (Oct 11, 2005)

Churn just increased. I canceled my service on Monday


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## ansky (Oct 11, 2005)

jpl said:


> You ain't kidding - not to get OT, but my wife and I were recently shopping for a new car. ALL dealerships are now ghosttowns - you can't walk 5 feet from your car before at least one salesman descends on you. But nowhere did I see the level of desperation that was palpable at the local Saturn dealership. We test drove the Outlook (one of their cross-overs), and the one that we were looking at was a 2008 left-over. Yep, they still had a new 2008 on the lot, just a few months before the 2010s will be hitting the lots.
> 
> These numbers, by any measure, are just darn impressive on DirecTV's part, and I give them major kudos for it.


It's actually not that surprising that D* would increase subs in this bad economy. People are choosing to stay home more to save money so they need more to keep them occupied at home. I saw a story recently that companies like Netflix are adding large numbers of subs too.


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## MIAMI1683 (Jul 11, 2007)

First the numbers are very good. Congrats to the management at D* for having a vision and sticking to it. This is a very good thing. 

FYI...Not ALL car dealerships are ghostowns. Just the poorly run ones and most domestic brands!


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## Curtis0620 (Apr 22, 2002)

ansky said:


> Churn just increased. I canceled my service on Monday


But 1,000 others just signed up!


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## je4755 (Dec 11, 2006)

Piratefan98 said:


> Hard to argue with results .... this is a VERY successful company. I'm glad to be a subscriber (but I'll still be *****ing about new HD, PBS, bugs in the new Scoreguide, etc.) :lol:
> 
> Truly, they are the best provider on earth, but "best" doesn't mean perfect. Always room for improvement.
> 
> Jeff


Given these results, what is DirecTV's incentive to allocate money for new HD channels in the near- to mid-term? I fear you (and I and others) will be "*****ing" for quite a while.


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## jpl (Jul 9, 2006)

ansky said:


> It's actually not that surprising that D* would increase subs in this bad economy. People are choosing to stay home more to save money so they need more to keep them occupied at home. I saw a story recently that companies like Netflix are adding large numbers of subs too.


I'm not surprised that DirecTV added subscribers - the last half of 2008 was really great for them too. The difference is the acceleration of the growth. In Q3 and Q4 2008, DirecTV added alot of subscribers, but Verizon added more. In this quarter, Verizon added 299,000 subscribers (a big increase over 1Q 2008), but DirecTV went gangbusters and added 460,000. There's something that caused that acceleration in growth (from ~300,000/quarter to 460,000). DBS companies traditionally get a good number of subscribers through these deals with the telcos, which got me thinking that that had to be part of the equation for this quarter. I have nothing to back that up - I'd love to see the numbers - those who signed up via AT&T, e.g.


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## jpl (Jul 9, 2006)

MIAMI1683 said:


> First the numbers are very good. Congrats to the management at D* for having a vision and sticking to it. This is a very good thing.
> 
> FYI...Not ALL car dealerships are ghostowns. Just the poorly run ones and most domestic brands!


All the dealerships I saw were absolute ghosttowns (and we went to a number of them)... many are really well run (have been around for a very long time, with a good history in the area), and we didn't just visit the domestic dealerships. The Nissan dealership (looked at the Armada) was a ghosttown too - I think there was one other couple in on a Saturday afternoon looking at a car. That was par for the course for all the dealerships we went to - but the Saturn dealership seemed to exude a level of desperation that went beyond what the others were going through.

And in fact, the Ford dealership (where we ended up buying our car) was the only one that was in the process of actually expanding. Not that they had sales out the door, but they seemed to be weathering the storm better than most.

Ok, I'm off being OT... back to the topic at hand.


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## Steve (Aug 22, 2006)

je4755 said:


> Given these results, what is DirecTV's incentive to allocate money for new HD channels in the near- to mid-term? I fear you (and I and others) will be "*****ing" for quite a while.


I'm not so sure. Given how successful their current strategy is, why wouldn't DirecTV want to continue rolling out HD channels as quickly as possible, to drive churn % even lower? With SAC so high, it's probably cheaper for them to add HD content and retain subscribers than to replace existing subs with new ones. Especially since the satellite bandwidth needed is already in place. Just my .02. /steve


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## bonscott87 (Jan 21, 2003)

If I can get my boss out of my cube...


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## bonscott87 (Jan 21, 2003)

Ok, finally kicked my boss out (and stay out!) and I'm online falling asleep to some classical sounding music. Zzzzzzzzzzzzzz.

I will be as accurate as I can, paraphrase mostly. Others feel free to correct any mistakes or make additions of something I missed.
My personal comments if there are any will be ()

I'm sure the first 5 minutes will be the usual financial stuff, pretty much reading off the press release. Also remember that this *is* a financial/investor call so most of the information and questions will be of that nature but there are usually a couple nuggets of interest to us.


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## bonscott87 (Jan 21, 2003)

And we are live and up.


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## bonscott87 (Jan 21, 2003)

Chase speaking.

Results are mutli-year highs and low in churn.

AT&T had a positive start in Feb.
Digital transition had more of an impact then they anticipated.

First quarter that new customers taking HD and advanced DVR products were above 60%.


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## bonscott87 (Jan 21, 2003)

ARPU not where it needs to be. 4 reasons.
Mainly because of a lot of offers. But it obviously was offset by the number of sub growth.
Drop of premium channels effected it, probably due to the economy as people looked to save money.
PPV also declined.
Ad sales also up.

Sub growth was much higher then expected and thus caused a short term cost but will give a long term advantages. Will try to balance sub growth but short term growth is still a priority.

(In other words they want to actually *slow* sub growth somewhat so that short term costs won't be so high but they still want to grow at a good rate to be stronger long term).


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## bonscott87 (Jan 21, 2003)

Their strong brand name and offering is really pushing growth.

20% or so growth additions came from the telcos (AT&T)
Their Latino package is also driving growth.

Advanced product take rate is 60% as noted.

High quality subscriber base along with strong HD and DVR service is really driving down churn.


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## bonscott87 (Jan 21, 2003)

Most of the ARPU costs are due to hardware credits upgrading to HD and DVR products. Much more customers upgraded in Q1 despite the bad economy and they didn't expect that.

They really plan to work on ARPU this year.


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## bonscott87 (Jan 21, 2003)

% of people taking the HD DVR box more then doubled from last year. [Basically the uptake of the HR2x series is much higher then they have planned on. It's growing a lot.]


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## Doug Brott (Jul 12, 2006)

Better terms on programming costs to help keep costs low


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## bonscott87 (Jan 21, 2003)

They are talking a Latin America now.


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## Piratefan98 (Mar 11, 2008)

1. First and foremost, thanks for relaying this information ..... it makes for a very interesting read.

2. It's "than". Please .... in the name of everything holy ..... it's "than".



Jeff


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## bonscott87 (Jan 21, 2003)

Chase back on.

Very happy with their momentum going into the future.

Sunday Ticket renewed thru 2014.
Mentioned iPhone app and Scoreguide.

New sat launch in last half 2009 and largest 1080p library in the industry.

Need to balance the low and high end subs.

Expect 2009 sub growth to be much higher then then 2008 then expected.
They are taking measures to slow growth such as less new subscriber deals.


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## Doug Brott (Jul 12, 2006)

2009 subscriber growth should exceed 1 million subscribers


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## bonscott87 (Jan 21, 2003)

Q&A now.


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## bonscott87 (Jan 21, 2003)

Q: Subscriber trends. Changes to offers and intentionally dialed back offers to slow growth. How is it going already in 2nd quarter.

A: Won't comment too much on 2nd quarter. Reduced the discount offer in March. While they want to take market share they need to balance that growth and do it correctly.
Want to focus more on premium sales to help ARPU.


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## bonscott87 (Jan 21, 2003)

Question on stock stuff.


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## Curtis0620 (Apr 22, 2002)

Where's the question on HD expansion?


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## Doug Brott (Jul 12, 2006)

Curtis0620 said:


> Where's the question on HD expansion?


No one has asked about it .. Current question on where OTA additions where located.

No clear answer to that one, BTW.


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## bonscott87 (Jan 21, 2003)

Q: Detail on the surprise of OTA viewers coming to DirecTV. Will impact 2nd qtr?

A: They don't have a great handle on it but believe it was a positive. Hard to track but they feel they got more benefit from it then they thought.


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## bonscott87 (Jan 21, 2003)

Doug Brott said:


> No one has asked about it .. Current question on where OTA additions where located.
> 
> No clear answer to that one, BTW.


And most likely won't be. The investment houses rarely ask these kinds of questions.


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## bonscott87 (Jan 21, 2003)

Q: On AT&T

A: Certainly adding to their customers but it's not a defining moment in sub growth.


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## Piratefan98 (Mar 11, 2008)

bonscott87 said:


> Hard to track but they feel they got more benefit from it then they thought.


You did that on purpose. :new_cussi

Jeff


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## krock918316 (Mar 5, 2007)

Piratefan98 said:
 

> You did that on purpose. :new_cussi
> 
> Jeff


He's trying to listen and type. Give him a break.


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## bonscott87 (Jan 21, 2003)

Q: Why programming costs seem lower on DirecTV then cable.

A: Various things. Such that Fox News launched a year later then on DirecTV thus their cost was more.
[Lot's of "who knows" really.]
Their growth may have helped out in pushing programming costs down as well.


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## oldfantom (Mar 13, 2006)

Piratefan98 said:


> You did that on purpose. :new_cussi
> 
> Jeff


Irregardless, it is a mute point. :grin:


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## bonscott87 (Jan 21, 2003)

Q: What are they doing to mitigate churn as people are coming off the packages.

A: Most package deals are 12 months for new subs. Have a commitment for 24 months so you still have 12 months at the retail price.
Loyalty program.
Mostly they just want to have a great service and great choices to keep people to stay.
Upgrades to HD.

If an agent gets a call from someone off their initial deal it's flagged on screen.


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## bonscott87 (Jan 21, 2003)

krock918316 said:


> He's trying to listen and type. Give him a break.


Plus I can honestly say I've never spelled it like that in my life and never knew it's supposed to. Never give it a second thought. Plus I'm a terrible speller. 

Anyway...back to the show...


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## Piratefan98 (Mar 11, 2008)

krock918316 said:


> He's trying to listen and type. Give him a break.


I know .... just teasing. :lol:


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## bonscott87 (Jan 21, 2003)

Talking about credit ratings and the bond market.


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## bonscott87 (Jan 21, 2003)

Q: AT&T. Dish (I think she said that) said their churn was higher with AT&T customers. How can they keep that down.

A: Don't know about them but for DirecTV they don't separate them, they are all our customers. Want to give them the best experience. They do answer most of the phone calls from telco customers.
Bundling helps reduce telco churn. They also have longer term telco subs, AT&T just started.


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## bonscott87 (Jan 21, 2003)

Q: Cable feels they will close the "HD gap" this year. What's the next competitive advantage.

A: They feel they have legs in the HD arena.
Additional capacity still, especially with the new satellite later this year will continue to grow HD.
Masters golf and tennis in HD they have advertised a bit.
More technology things in home coming soon they can leverage.

Q: Impact from Dish's "Turbo" HD only?

A: We didn't respond because they didn't feel it impacted them. If it did they would have addressed it
[Thus they feel an HD only package doesn't make them any more competative is my take].


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## Doug Brott (Jul 12, 2006)

Q: HD Messaging is getting stale as competitors catch up .. What's next messaging?

A: HD still a big part, happy with results .. Beyond? DVR Scheduler, iPhone are recent examples .. Content tie in (Masters) other examples .. New stuff? You'll have to wait and see .. mentioned technology and in home functionality


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## bonscott87 (Jan 21, 2003)

Q: Do they still feel with cable approaching 100 HD channels, what is next for DirecTV to position their offering as superior? Choices vs. channels?

A: He disagrees that HD is getting to 100 channels and you're done. Still more to do like things in PPV, 1080p, mix channels and so forth. Cable is different in every market whereas DirecTV is the same everyone in offerings.

Capacity to add more channels *which they will when the new satellite lights up later this year.*
[Like many have said, they are holding back to add a whole lot more HD until D12 goes up].

Want to keep leading in content. Want to maintain the their market perception as the HD leader and strong HD brand and add new features.


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## bonscott87 (Jan 21, 2003)

Q: Telco relationships

A: Good things with Verizon and their DSL service end of last year.
Doesn't view it as an impact event in the 1st qtr results.


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## bonscott87 (Jan 21, 2003)

Q: SAC went down, any particular reason?

A: Benefited with the volume of adds due to fixed marketing. Hardware costs down even with the greater % of advanced products including the high end HD DVR product.


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## bonscott87 (Jan 21, 2003)

Q: Are you lowering costs when you renegotiated local carriage.

A: It's more negotiating a new deal at the end of a current deal. But doesn't want to get into details. But they always try to drive costs down.

Q: What % of customers are coming from Dish?

A: They feel they are competing effectively with Dish and hard to tell how AT&T deal switch effected it.


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## bonscott87 (Jan 21, 2003)

Q: Home whole experience still on track for 2010?

A: Moving forward. 
2nd half of 2009. 1st iteration is to have the various boxes to talk to each other. 1st generation of it.
2010 is the next generation where the boxes are a true media center.
So still on track.


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## bonscott87 (Jan 21, 2003)

And with that, it's over.

Whew!

Wow, that was a lot of questions.


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## bonscott87 (Jan 21, 2003)

So, I think a couple of the big things of most interest to us is:

1) More HD is coming, although not as soon as many would like. He did not rule out more HD now, but made mention a couple times to an HD push once the new sat is up and running later this year.

Personally I've had the feeling that they have been "holding back" some as a safety measure. Why fill up what they have now if D12 fails then they may not have the mix of channels they want with no room to add any more. So get D12 up and running then add the ones they want in the right mix. In other words why fill up now with Grass Growing HD channel when there may be "better" HD channels available later on and then they can't add those if D12 has problems. Better safe then sorry which has been DirecTV's mantra for many years.

2) Whole home DVR/Media Center is on track. We're testing the 1st part (MRV) now in CE. New boxes built to be media centers coming in 2010.


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## Doug Brott (Jul 12, 2006)

Scott,

Thanks for the great coverage ..

Highlights I thought were:


HD & Advanced Products above 60%
Better terms on programming costs to help keep subscriber costs down
Expecting 2009 sub growth to exceed 1 million
Expecting to continue as "strong leader in HD" with launch of new satellite
Whole Home Experience still on track for 2010


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## Colby (Dec 8, 2008)

As always, thank you you two for transcribing this on the fly!


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## Steve (Aug 22, 2006)

Doug Brott said:


> Scott,
> 
> Thanks for the great coverage ..
> 
> ...


So, (18 million subs) x (60% HD) x (1/2 are HR2x users?) x (average 2 DVR's per household?) = 10,000,000+ HR2x's out in the field. That's a lot of HR's!!!

I suspect more than 1/2 the HD subscribers have HR's, but just trying to be conservative.  /steve


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## Mike Bertelson (Jan 24, 2007)

Thanks Scott? 

It seems that we won't see many new HD channels prior to D12 going up.

I doubt that means a complete hold but time will tell.

Mike


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## Newshawk (Sep 3, 2004)

Doug Brott said:


> Scott,
> 
> Thanks for the great coverage ..
> 
> ...


What I picked up on was that the 60% advanced product "take" was on new subscribers. Chase still didn't give a hard figure on just how many subscribers overall have advanced products, and how many of that are HD products. Also, DirecTV is actually taking steps to moderate new subscriber growth. They apparently don't want to grow too fast and overwhelm the installation/service infrastructure as well as keeping costs constant.


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## bonscott87 (Jan 21, 2003)

Newshawk said:


> What I picked up on was that the 60% advanced product "take" was on new subscribers. Chase still didn't give a hard figure on just how many subscribers overall have advanced products, and how many of that are HD products.


In their 4th quarter call he stated that nearly half of their subscribers have HD/DVR products.
Now with 60% of new subs taking HD/DVR I'd assume that half the subs if not more still have HD/DVR products. He also mentioned a higher uptake of current subs upgrading to HD which impacted their ARPU so that helps solidify these numbers.


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## ncxcstud (Apr 22, 2007)

bonscott87 said:


> So, I think a couple of the big things of most interest to us is:
> 
> *1) More HD is coming, although not as soon as many would like. He did not rule out more HD now, but made mention a couple times to an HD push once the new sat is up and running later this year.
> 
> ...


Does the 'holding back' of HD channels until D12 goes up more applicable to national HD channels or does it include future local HD channels as well?


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## Doug Brott (Jul 12, 2006)

Newshawk said:


> What I picked up on was that the 60% advanced product "take" was on new subscribers. Chase still didn't give a hard figure on just how many subscribers overall have advanced products, and how many of that are HD products. Also, DirecTV is actually taking steps to moderate new subscriber growth. They apparently don't want to grow too fast and overwhelm the installation/service infrastructure as well as keeping costs constant.


yeah you are probably right here ..


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## Doug Brott (Jul 12, 2006)

ncxcstud said:


> Does the 'holding back' of HD channels until D12 goes up more applicable to national HD channels or does it include future local HD channels as well?


HD Locals have expanded a lot this year. Much of the growth has been added channels in existing markets and it's happened so often that we don't even have all of the information here. One thing is for certain .. HD locals are becoming less and less of an issue, but if it's affecting you personally I can see how it's hard to accept that as an answer.


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## David MacLeod (Jan 29, 2008)

Hutchinshouse said:


> Source?
> 
> Verizon added 299,000 FiOS TV subscribers in Q1. Everyone always says FiOS is not offered everywhere. For not being offered everywhere, 300k new subscribers in Q1 sounds pretty impressive to me. Link: http://money.cnn.com/news/newsfeeds...growth_accelerates_wireless_solid_2009_4.html


there are about 6k people right here in my area that can never have fios due to a telecom (TDS) owning the lines and refusing access to all carriers. there are many areas like this up here, no cable in many of them either. so its antenna or a dish.
these are the #'s that fios can't affect.


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## ncxcstud (Apr 22, 2007)

Doug Brott said:


> HD Locals have expanded a lot this year. Much of the growth has been added channels in existing markets and it's happened so often that we don't even have all of the information here. One thing is for certain .. HD locals are becoming less and less of an issue, but if it's affecting you personally I can see how it's hard to accept that as an answer.


Yep that answer definitely doesn't please me 

Still waiting for one of the top 100 TV markets (Columbia, SC) to finally get local HD channels from DirecTV....I thought it would come a lot quicker once Dish rolled them out last year...but my antenna works splendidly for now...just wish I didn't have to use it.


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## harsh (Jun 15, 2003)

Doug Brott said:


> HD & Advanced Products above 60%


From Scott's reporting, this 60% was of the new customers. In the past the number that had been reported was a percentage of the entire subscriber base.

Given that the advanced receiver penetration in the entire customer base was over 50% at EOY 2008, I'm surprised a little that the percentage of new customers with advanced equipment wasn't much higher; especially if DIRECTV's HD programming is as big a draw as some make it out to be. It only takes one DVR or HD receiver to put you in the advanced receiver camp and you're only a virgin once.


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## Packersrule (Sep 10, 2007)

jpl said:


> All the dealerships I saw were absolute ghosttowns (and we went to a number of them)... many are really well run (have been around for a very long time, with a good history in the area), and we didn't just visit the domestic dealerships. The Nissan dealership (looked at the Armada) was a ghosttown too - I think there was one other couple in on a Saturday afternoon looking at a car. That was par for the course for all the dealerships we went to - but the Saturn dealership seemed to exude a level of desperation that went beyond what the others were going through.
> 
> And in fact, the Ford dealership (where we ended up buying our car) was the only one that was in the process of actually expanding. Not that they had sales out the door, but they seemed to be weathering the storm better than most.
> 
> Ok, I'm off being OT... back to the topic at hand.


I agree - I went to the Honda dealship - You can pick any type or color and have 4 people help you.


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## Doug Brott (Jul 12, 2006)

harsh said:


> From Scott's reporting, this 60% was of the new customers. In the past the number that had been reported was a percentage of the entire subscriber base.


Yes, and I believe I've already issued my "oops" above ...


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## Ken S (Feb 13, 2007)

So, from a subscriber's (as opposed to shareholder) point of view.

1. Less deals/discounts
2. They want us to pay more per month (ARPU increase) (even though their costs are decreasing)
3. More sales effort on premium channels.
4. No/Few new HD channels until D12 launches.
5. Home Media Server is coming (of course that's been said since 2006).


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## Shades228 (Mar 18, 2008)

Ken S said:


> So, from a subscriber's (as opposed to shareholder) point of view.
> 
> 1. Less deals/discounts
> 2. They want us to pay more per month (ARPU increase) (even though their costs are decreasing)
> ...


Sounds the same even as a shareholder.


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## dcowboy7 (May 23, 2008)

Ken S said:


> 1. Less deals/discounts


Hope thats not a bad omen for the free Superfan.


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## inkahauts (Nov 13, 2006)

Ken S said:


> So, from a subscriber's (as opposed to shareholder) point of view.
> 
> 1. Less deals/discounts
> 2. They want us to pay more per month (ARPU increase) (even though their costs are decreasing)
> ...


2. Has nothing to do with existing customers... Its going to be an offshoot of number 1... By having less new customers, they will knock down their initial costs, which will drive up ARPU by default. The other tie in is that it also means they will push premiums more...

Frankly, from a marketing position, I would read all this to say that they will be luring customers one of four ways as the year progresses.. Great deals on PREMIUM channels, (sports, as always) more HD (after D12) and a new angle which they haven't used, at least in a very long time... Their equipments capabilities... (see MRV, Directv2pc, iphone, scheduler, etc...) (and no, they haven't maximized that angle at all in the last few years...)

At the begining of this year, a lot of deals where around just for getting HD separate from premiums.. I think those are the ones that we won't see show up much for the year, except maybe for a couple weeks in June... (thats what I'd do...)


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## dcowboy7 (May 23, 2008)

inkahauts said:


> The other tie in is that it also means they will push premiums more.


If they want to push premiums more its gonna hurt not having alot in HD....free hbo/skinemax weekend & out of what like about 11 channels only really 2 are HD (east/west =1)....thats a joke.


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## marcschibig (Apr 17, 2009)

are the books cooked? that would never happen


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## Sixto (Nov 18, 2005)

thank bonscott87!

and here's the link: http://seekingalpha.com/article/136...-inc-q1-2009-earnings-call-transcript?page=-1


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## Drew2k (Aug 16, 2006)

Scott and Doug - thanks for scribing. 


bonscott87 said:


> Q: Home whole experience still on track for 2010?
> 
> A: Moving forward.
> 2nd half of 2009. 1st iteration is to have the various boxes to talk to each other. 1st generation of it.
> ...


So what is the consensus from the tea leave readers abou tthe whole home solution? Will it be new hardware? Or software upgrades on existing hardware that creates the solution? I'm thinking it's the latter since we're seeing the first signs of this already in MRV testing and there's lots of talk about SWM8 multiswitches and MOCA, etc. Thoughts?

Never Mind - I just found the answer from the link Sixto provided. It's ultimately going to be new hardware ...



> The Whole-Home Solution, yeah, we're actually moving forward. We are going to move forward in the second half of the year. The first generation, again, it's sort of to have boxes speak to each other. I was just looking at the demo yesterday that moves sort of a HD DVR and HD Boxes to be access content from each other so that you could have an HD DVR and HD Box in another room in the house, could access that disc and tie into the PC.
> 
> It's all part, which is really the first generation of it before we move to really, which is r*eally more a 2010 move to a generation of the box that is really built specifically as more of a media center*, tying two devices. The first generation that we will be moving forward in the second half of this year is the one that has the boxes ability to speak to each other, as well as tying to PC. So that is on track for the second half.


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## harsh (Jun 15, 2003)

inkahauts said:


> By having less new customers, they will knock down their initial costs, which will drive up ARPU by default.


ARPU is increased by the new customer promotions as subscribers will often go for more programming when it doesn't cost so much. The cost of those promotions figured into the SAC as opposed to being subtracted from ARPU.


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## Shades228 (Mar 18, 2008)

harsh said:


> ARPU is increased by the new customer promotions as subscribers will often go for more programming when it doesn't cost so much. The cost of those promotions figured into the SAC as opposed to being subtracted from ARPU.


I believe that SAC does not calculate rebates and promotional programming.


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## inkahauts (Nov 13, 2006)

harsh said:


> ARPU is increased by the new customer promotions as subscribers will often go for more programming when it doesn't cost so much. The cost of those promotions figured into the SAC as opposed to being subtracted from ARPU.


Sorry all, I used the wrong acronym...

An increase in $30 revenue does not offset $350+ in three months, no matter how you slice it... I am saying the reason their profit is down per customer is because of this.. That will change as less new subs are added...


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## bonscott87 (Jan 21, 2003)

Drew2k said:


> Scott and Doug - thanks for scribing.
> So what is the consensus from the tea leave readers abou tthe whole home solution? Will it be new hardware? Or software upgrades on existing hardware that creates the solution? I'm thinking it's the latter since we're seeing the first signs of this already in MRV testing and there's lots of talk about SWM8 multiswitches and MOCA, etc. Thoughts?
> 
> Never Mind - I just found the answer from the link Sixto provided. It's ultimately going to be new hardware ...


Yea, that's it. Basically it will be a new generation receiver, the "hub" of a media center. Maybe quad tuners or something, massive hard drive and stuff. Basically the big server with clients to view stuff around the house.

I almost view all the MRV and stuff going on now as a "beta" test for this new media server. Chase has said as much in the past. This is the 1st generation and will be a proving ground for the technology. And a side bonus is that we get it now and don't need the new box to have MRV.


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## Ken S (Feb 13, 2007)

inkahauts said:


> 2. Has nothing to do with existing customers... Its going to be an offshoot of number 1... By having less new customers, they will knock down their initial costs, which will drive up ARPU by default. The other tie in is that it also means they will push premiums more...
> 
> Frankly, from a marketing position, I would read all this to say that they will be luring customers one of four ways as the year progresses.. Great deals on PREMIUM channels, (sports, as always) more HD (after D12) and a new angle which they haven't used, at least in a very long time... Their equipments capabilities... (see MRV, Directv2pc, iphone, scheduler, etc...) (and no, they haven't maximized that angle at all in the last few years...)
> 
> At the begining of this year, a lot of deals where around just for getting HD separate from premiums.. I think those are the ones that we won't see show up much for the year, except maybe for a couple weeks in June... (thats what I'd do...)


I was speaking from the terms of an existing customer. The only way they are going to really increase ARPU (18 million existing customers vs the 2 - 3 million they'll churn in) is to:

1. Increase monthly fees hardware or programming
2. Reduce programming discounts to existing customers
3. Sell more premium packages (doubt this will make a difference)

I don't believe that 3 will really help though as to sell more premium packages they'd probably have to either offer more or lower their cost.

New customers only effect on ARPU is the programming discounts they're given at the outset.

I think we can expect a price increase in the future. Hopefully, they'll wait until next March, but you never know. I guess we could see them take channels out of tiers and put them into premium packages like they did with HD Extra.

Whatever they do..DirecTV customers should understand and expect the target is ARPU at $100 in the next 2 - 3 years.


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## Ken S (Feb 13, 2007)

inkahauts said:


> Sorry all, I used the wrong acronym...
> 
> An increase in $30 revenue does not offset $350+ in three months, no matter how you slice it... I am saying the reason their profit is down per customer is because of this.. That will change as less new subs are added...


Their profit is also down per customer because customers are reducing the premium packages they're subscribing to and dropping from higher tier to lower tier programming packages.


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## hdtvfan0001 (Jul 28, 2004)

The biggest number among all of them is the 18 Million subscriber count.

Let's see how that flies compared to next week's Dish report...


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## Steve615 (Feb 5, 2006)

I considered starting a new thread with this post,but decided to place it here.

From Variety:
Liberty CEO Greg Maffei says a purchase of DirecTV by another company is possible after DirecTV is spun off.
Maffei made the comments during an interview with The Associated Press today.
More info in a brief article from Variety at the following link.

http://www.variety.com/article/VR1118003385.html?categoryid=18&cs=1


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## Ken S (Feb 13, 2007)

hdtvfan0001 said:


> The biggest number among all of them is the 18 Million subscriber count.
> 
> Let's see how that flies compared to next week's Dish report...


Are you a DirecTV shareholder?


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## Jhon69 (Mar 28, 2006)

Looks like in this article Chase knows where the problem is and is trying to minimize it.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aUUYNcurwGOU&refer=home


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## Jhon69 (Mar 28, 2006)

hdtvfan0001 said:


> The biggest number among all of them is the 18 Million subscriber count.
> 
> Let's see how that flies compared to next week's Dish report...


Well Dish should add more HD.After all that ship is sinking.

Noticed how Dish added more HD channels right before the report so the effect won't show up now?.


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## ghfiii (Mar 25, 2005)

oldfantom said:


> Irregardless, it is a mute point. :grin:


I see what you did there, that should be *regardless *and *moot point*.

Gives new meaning to the phrase "read it and weep" :lol:

If English wasn't getting butchered left and right, that would be funny...


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## bonscott87 (Jan 21, 2003)

*Dish lost 94,000 subs in 1st quarter.*

http://www.dbstalk.com/showthread.php?t=157891


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## Steve (Aug 22, 2006)

bonscott87 said:


> *Dish lost 94,000 subs in 1st quarter.*
> 
> http://www.dbstalk.com/showthread.php?t=157891


I'm not happy to hear that. We need a healthy Dish to keep DirecTV from becoming complacent.

No competition is no good, IMHO. /steve


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## RCY (Nov 17, 2005)

Steve said:


> I'm not happy to hear that. We need a healthy Dish to keep DirecTV from becoming complacent.
> 
> No competition is no good, IMHO. /steve


+1


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## Shades228 (Mar 18, 2008)

Steve said:


> I'm not happy to hear that. We need a healthy Dish to keep DirecTV from becoming complacent.
> 
> No competition is no good, IMHO. /steve


There is still plenty of competition in most areas. The biggest impact would be rural areas that can't get any provider other the DBS. However that market is dwindling every year.

Dish would get bought out before it went under. The only people I feel bad for with Dish's numbers are their employees. Operation costs are the easiest and cheapest way to reduce $$.


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## wmj5 (Aug 26, 2007)

I have been with D* since Sept. 13th 1995, I thought everthing was pretty good untill they come out with hd, now I'm a senior citizen amd I don't watch any sports period, and very few movies, which I have a brand new sony dvd player, and a new tv antenna, I have been on hd about 2 and 1/2 yrs. first I haven't had a receiver yet that sonething wasn't wrong with it I am paying for the protection plan so I won't have to pay to fix their equipment, I pay for the choice package, then what ever channels that is in hd I have to pay $9.99 a month to see it in hd,( I think that is double dipping), I would supposed I watch about 5 channels in which some of those are free with antenna, but they slipped the locals in the package and you can't drop them,so I'm a man of a few words $76.00 or so is just too much to watch what I use, so in about 5 months I'm going on the antenna for free and see how that works out, btw I can get 23 channels, and thats before I get my rotator. thanks for my 2 cents.


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## Jhon69 (Mar 28, 2006)

wmj5 said:


> I have been with D* since Sept. 13th 1995, I thought everthing was pretty good untill they come out with hd, now I'm a senior citizen amd I don't watch any sports period, and very few movies, which I have a brand new sony dvd player, and a new tv antenna, I have been on hd about 2 and 1/2 yrs. first I haven't had a receiver yet that sonething wasn't wrong with it I am paying for the protection plan so I won't have to pay to fix their equipment, I pay for the choice package, then what ever channels that is in hd I have to pay $9.99 a month to see it in hd,( I think that is double dipping), I would supposed I watch about 5 channels in which some of those are free with antenna, but they slipped the locals in the package and you can't drop them,so I'm a man of a few words $76.00 or so is just too much to watch what I use, so in about 5 months I'm going on the antenna for free and see how that works out, btw I can get 23 channels, and thats before I get my rotator. thanks for my 2 cents.


If you could drop locals you would only save $3..


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## bonscott87 (Jan 21, 2003)

Personally I say don't pay for channels you aren't watching. If not for sports I could probably get 99% of all our viewing taken care of via OTA with a Tivo HD unit along with Hulu and other online services plus Netflix. I'd save a bunch.

But I just can't make that move. I'd miss too much. But if you won't then make the OTA move and save the moola.


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## Shades228 (Mar 18, 2008)

Drop to the family package and see how much you miss the other channels. If you don't then you can look at further options but atleast this way you didn't cancel and then have to wait for reinstalation if you chose to get it back.


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## harsh (Jun 15, 2003)

Jhon69 said:


> If you could drop locals you would only save $3..


Have you done (or tried to do) this?


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## Shades228 (Mar 18, 2008)

harsh said:


> Have you done (or tried to do) this?


He's just going on information where local channels are not offered. The price is $3 less however if locals are in that area you cannot drop them unless you're grandfathered into a package without locals.


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## bonscott87 (Jan 21, 2003)

harsh said:


> Have you done (or tried to do) this?


If locals aren't available in your area you can get a $3 credit for "no locals".


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## Shades228 (Mar 18, 2008)

bonscott87 said:


> If locals aren't available in your area you can get a $3 credit for "no locals".


There is no credit the package is labeled as XXX - no locals and is 3 dollars less.


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## bonscott87 (Jan 21, 2003)

Shades228 said:


> There is no credit the package is labeled as XXX - no locals and is 3 dollars less.


Ok. Same thing in the end.


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## Jhon69 (Mar 28, 2006)

harsh said:


> Have you done (or tried to do) this?


I have not.Because for $3. it's the best deal in town.I live in a severe multisignal area.I belive also DirecTV will not let you drop locals that's why I said"IF".

If a DirecTV subscriber wants to"save money" they should go with the Family package or the Preferred Choice package or "if " they can cancel try Dish's lower priced package."If" I was trying to survive in "hard times" I would have nothing but OTA.


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## harsh (Jun 15, 2003)

Jhon69 said:


> I have not.Because for $3. it's the best deal in town.


That and because contrary to your recommendation, you're not able to take locals off of your programming plan even if you want to.


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## wmj5 (Aug 26, 2007)

someone said $3.00 for local channels is not much money, it's not to one person but D* has 18 million sud. thats add up to 18 million dollars, but theres other things, they charge you so much for a package then turn around and charge you $10.00 per month to watch the same channels in hd, then you buy , or they call it lease your equitment from them and then they want you to keep it up if anything goes wrong with it, thats like renting a house and if the roof leaks or the bathroom don't work right the man that owns the house fixes is, he don't come to you to fix it.


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## bonscott87 (Jan 21, 2003)

wmj5 said:


> someone said $3.00 for local channels is not much money, it's not to one person but D* has 18 million sud. thats add up to 18 million dollars, but theres other things, they charge you so much for a package then turn around and charge you $10.00 per month to watch the same channels in hd,


Hmmmm. Sounds like pretty much every other multi-channel provider.



> then you buy , or they call it lease your equitment from them and then they want you to keep it up if anything goes wrong with it, thats like renting a house and if the roof leaks or the bathroom don't work right the man that owns the house fixes is, he don't come to you to fix it.


 If your leased receiver breaks DirecTV will replace for free or at most a $20 shipping charge (waived if you have protection plan). So not sure what you're talking about there.


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## Jhon69 (Mar 28, 2006)

wmj5 said:


> someone said $3.00 for local channels is not much money, it's not to one person but D* has 18 million sud. thats add up to 18 million dollars, but theres other things, they charge you so much for a package then turn around and charge you $10.00 per month to watch the same channels in hd, then you buy , or they call it lease your equitment from them and then they want you to keep it up if anything goes wrong with it, thats like renting a house and if the roof leaks or the bathroom don't work right the man that owns the house fixes is, he don't come to you to fix it.


Would you like to own one?.

http://www.solidsignal.com/prod_display.asp?PROD=HR21PRO


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