DirecTV pushes premium brand, even in weak economy
[2008-7-25]
Tag : high-end cable
When comedy talk show host Jimmy Kimmel actsas a pitch man for DirecTV (nyse: DTV - news - people ) this summer, he joins a list of celebrities the U.S. satellitetelevision provider has engaged to promote itself as a premiumbrand.
A focus on high-definition programming has helped DirecTV Group Incdrive subscriber growth, but it could become a liability asconsumers tighten their purse strings in the face of rising gasprices and the weak economy, analysts say. "There is the possibility that being a premium brand at the highend of the pay-TV market may end up being negative for DirecTV,"said Kaufman Bros analyst Todd Mitchell.
DirecTV's growth is expected to have slowed in the second quarter,when it is forecast a gain of 100,000 to 150,000 net customers,according to three analysts polled by Reuters. That compares with275,000 additions in the first quarter.
But growth is still seen better than that of rival DISH NetworkCorp, which positions itself as a low-cost provider of satellite TVand has suffered operational missteps compounded by the pooreconomy. The analysts expect DISH to have added between 19,000 and75,000 net subscribers.
DirecTV has been more successful than other U.S. pay-TV operatorsin building a reputation for high-definition and exclusiveprogramming, including football's NFL Sunday Ticket, which Kimmelwill promote.
It has the highest average video revenue per user in the U.S.pay-TV market, at around $80 a month. In second place is cablecompany Comcast Corp (nasdaq: CMCSA - news - people ) with $76, while DISH generates $68.
When comedy talk show host Jimmy Kimmel actsas a pitch man for DirecTV (nyse: DTV - news - people ) this summer, he joins a list of celebrities the U.S. satellitetelevision provider has engaged to promote itself as a premiumbrand.
A focus on high-definition programming has helped DirecTV Group Incdrive subscriber growth, but it could become a liability asconsumers tighten their purse strings in the face of rising gasprices and the weak economy, analysts say. "There is the possibility that being a premium brand at the highend of the pay-TV market may end up being negative for DirecTV,"said Kaufman Bros analyst Todd Mitchell.
DirecTV's growth is expected to have slowed in the second quarter,when it is forecast a gain of 100,000 to 150,000 net customers,according to three analysts polled by Reuters. That compares with275,000 additions in the first quarter.
But growth is still seen better than that of rival DISH NetworkCorp, which positions itself as a low-cost provider of satellite TVand has suffered operational missteps compounded by the pooreconomy. The analysts expect DISH to have added between 19,000 and75,000 net subscribers.
DirecTV has been more successful than other U.S. pay-TV operatorsin building a reputation for high-definition and exclusiveprogramming, including football's NFL Sunday Ticket, which Kimmelwill promote.
It has the highest average video revenue per user in the U.S.pay-TV market, at around $80 a month. In second place is cablecompany Comcast Corp (nasdaq: CMCSA - news - people ) with $76, while DISH generates $68.
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