DirecTV (DTV) had a whale of a quarter. Profits were up 43% to $336 million. Revenue rose 15% ot $3.91 billion. Gross subscription increases rose to 929,000 and the company ended that quarter with 16.2 million customers.
DTV’s "churn rate", a measure of how many customers cancel, fell to 1.44%, its best result against that metric in three years.
But, there are only so many eyes watching TV. And, according to many studies, television viewership hours are being cut by internet use.
Verizon (VZ) and AT&T (T) are putting in huge fiber networks to try to take TV customers from cable. Cable companies are investing in video-on-demand. Comcast (CMCSA) is even building a large web portal to take advantage of traffic to comcast.com and comcast.net. The new site will have video to rival what it shows on its cable networks.
And, none of this is to overlook the Amazon (AMZN) Unbox, Apple (AAPL) video iPod, and online movie initiatives from firms like Wal-Mart (WMT) and NetFlix (NFLX).
In short, if satellite TV is doing well and so are cable earnings, what will become of the huge investment that telephone companies are making in intiative to bring fiber TV to the home.
It does not look good for the telecom companies who are still a year or more away from having their fiber networks up. They may just want to buy a satellite TV company.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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