QUOTE AND NEWS
Reuters  Sep 12  Comment 
DirecTV expects its merger with wireless operator AT&T Inc to finalize around April 2015, chief executive Mike White told investors at a conference on Friday.
Reuters  Sep 12  Comment 
DirecTV, the largest U.S. satellite provider, expects to finalize its much anticipated contract with the National Football League for rights to the popular Sunday Ticket...
Reuters  Sep 12  Comment 
(Updates ThyssenKrupp; Adds EBay, Shell, HP, Porsche, Tottenham Hotspur, Digital First Media, Darden, DirecTV, Newcastle United and Snam)
Yahoo  Sep 12  Comment 
Univision's content would be a crucial offering for DirecTV's online service, which is expected to launch later this year. It would also help the satellite operator to counter smaller rival Dish Network Corp (DISH.O), which is creating a...
Reuters  Sep 11  Comment 
Hispanic media giant Univision will be a major supplier of content when satellite operator DirecTV launches an Internet-delivered service aimed at a Hispanic audience, according to two people with knowledge of the agreement.
Yahoo  Sep 11  Comment 
State attorneys general working to determine whether Comcast Corp's deal to buy Time Warner Cable Inc is legal have expanded their investigation to include AT&T Inc's plans to buy DirecTV, according to sources close to the merger probe. Justice...
Market Intelligence Center  Sep 11  Comment 
DIRECTV Group Inc (DTV) is a good candidate for a covered call at the $85.00 level. The Mar. '15 call at that price should fetch a credit of about $4.75, which means the entire position has a net debit of about $81.90. This trade has 4.15%...
TheStreet.com  Sep 10  Comment 
NEW YORK (TheStreet) -- DirecTV shares had coverage initiated with a "hold" rating and $95 price target by analysts at Canaccord Genuity on Wednesday.a The firm notes that witha20 million subscribers, DirecTV is the country's leading...
TheStreet.com  Sep 6  Comment 
PORTLAND, Ore. (TheStreet) –- DirecTVa is just about worthless without NFL Sunday Ticket, which is why it needs to keep its football package nice and exclusive. DirecTV is in the final year of a deal with the National Football League that paid...




 
TOP CONTRIBUTORS

The DirecTV Group (NASDAQ:DTV) is the largest provider of household satellite television in the United States and has a customer base of over 18.5 million.[1] The company markets itself as the leading provider of differentiated and exclusive content, and the leader in high definition (HD) programming. DTV offers exclusive programming such as the NFL SUNDAY TICKET package and over 95 Spanish and international language channels, which are not available via cable or other satellite service providers.

Satellite television is the leading alternative to the traditional cable television and has experienced rapid growth in the past decade. However, DTV and the satellite industry continues to face challenges from traditional cable companies like Comcast (CMCSA), Cablevision Systems (CVC), and Time Warner Cable. These companies are not only much larger than their satellite competitors, but also have capacity to offer bundled services which includes TV, telephone, and high speed internet. DTV has recently begun to offer similar services through a partnership with AT&T (T) and other internet service providers, but may lose the ability to do so, as AT&T (T) continues to roll out its own video services.

Company Overview

DTV's revenue comes from the monthly subscription rates for programming that it provides to households. Depending on the number of channels and premium programming that a customer requests, the amount each household pays can be vastly different. For acquiring each customer, DTV incurs significant costs by often times giving away equipment and providing installation. The company sales strategy is to recoup the cost by ensuring the customer stays with the company for at least a few years.

Business Financials

In 2009, DTV posted total revenues of $21.6 billion, an increase from its 2008 total revenues of $19.7 billion.[2] However, its net income did not have an increase. Between 2008 and 2009, DTV's net income declined by 50%, from $1.52 billion in 2008 to $1.01 billion in 2009.

Business Segments

DirecTV operates through 2 primary segments: i) DirecTV U.S., and ii) DirecTV Latin America.

DirecTV U.S.

This segment distributes over 1,700 digital video and audio channels, including 70 XM Satellite Radio music channels, 31 premium movie channels, over 35 regional and specialty sports networks, 95 Spanish and other foreign language channels, and over 45 pay-per-view channels.

DirecTV Latin America

DirecTV Latin America is the leading provider of digital television services throughout Latin America, which includes South America, Central America, and the Caribbean. DTV LA provides service under the DIRECTV and SKY brands to approximately 1.3 million subscribers in Brazil and approximately 1.4 million subscribers in the rest of South America. DTV's affiliate, Sky Mexico, has approximately 1.4 million subscribers in Mexico.

Trends and Forces

Bundling

Bundling is the marketing strategy of cross-selling customers across cable, Internet, and voice services. For example, Comcast (CMCSA) offers this bundled service as the "Triple Play" and charges approximately $99 per month. Consumers benefit because they have one consolidated monthly bill, and one company to deal with if there are problems. DTV primarily offers entertainment and has begun to offer high-speed internet through a partnership with AT&T (T) and other internet service providers. However, DTV still doesn't offer voice services and may therefore face tough competition from the cable industry, if customers favor the full bundling option.

Housing Market

With more than 85% of television owners already paying for cable or satellite services, the number of new potential cable customers is small. New homes provide new potential customers for cable companies and as a result, growth in the cable industry is closely tied with growth in the housing market. Recent deceleration of the housing market could mean a loss of growth for DTV's service.

FCC Regulation

The FCC covers communications by radio, television, wire, satellite and cable in the United States. New regulation, such as the rule requiring all new TVs to contain a tuner capable of receiving digital broadcasts, instead of the old analog signals, by 2009, can have significant impact on the industry.[3] The switch to digital could benefit DTV, since it is currently the leading carrier of HD and digital channels.

Competition

DTV faces competitors in the satellite television market and in the home entertainment sector at large. EchoStar Communications (DISH) is its main competitor in the satellite television market and has nearly 13 million customers. However, DirectV is sold in more electronic retailing stores than Echostar, and as a result Echostar must spend more on advertising to spread the word of its existence than DirecTV. DirecTV also has an advantage over EchoStar, by providing the most comprehensive offering of HD programming. DTV also faces tough competition from cable television competitors such as Time Warner Cable, Comcast, and Charter Communications (CHTR).

Reference

  1. DTV 10-K 2009 Item 1 Pg. 4
  2. DTV 10-K 2009 Item 7 Pg. 51
  3. Boston Globe
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