Wednesday, February 08, 2006

DirecTV improves earnings and churn rates

Satellite television operator DirecTV Group posted a quarterly profit versus a year-earlier loss, as the customer turnover rate improved.

DirecTV, controlled by Rupert Murdoch's News Corp, also announced a $3 billion share buyback plan. Their shares rose 5%. Revenue rose 7% to $3.6 billion from $3.36 billion.

News Corp is starting to make their mark on DirecTV. With everything that they have learnt from running Europe's most successful satellite TV group, BSkyB, they are now implementing changes at DirecTV. But there is much to do as the disappointing new customer numbers show.

They will focus short term on improving customer churn rates and customer profitability. This they will do by improving content and packaging.

But to really grow the business they have to move fast to offer their own triple play of TV, hi-speed Internet access and telephony. Until then (and this will not be for at least another year) they will continue to struggle versus Time Warner, Cablevision, Comcast and new entrants Verizon and AT&T.

To get new subscriber numbers moving they will have to get their triple play to market fast.

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