DirecTV, Hughes Report 2Q

1811 Views 7 Replies 3 Participants Last post by Karl Foster, Jul 18, 2002

Steve Mehs

Discussion Starter · Jul 16, 2002

DirecTV missed its subscriber goal for the second quarter, but the satellite TV service and its parent - Hughes Electronics - posted some strong financial numbers for the three-month period.

DirecTV reported second quarter revenues of $1.549 billion, 15 percent higher than the previous second quarter. DirecTV's EBITDA was $148 million, nearly double last year's second quarter, Hughes executives said.

Hughes' revenues increased 11.3 percent to $2.209 billion, compared with $1.985 billion for the second quarter of 2001. Hughes' EBITDA for the quarter increased 50.1 percent to $123.1 million, compared with $82 million for second quarter 2001. Hughes' operating loss for the second quarter was $138.5 million, down from a loss of $223 million reported during the same quarter in 2001.

DirecTV's net subscriber additions of 202,000 for the second quarter fell short of the company's internal target of 225,000 to 250,000. However, DirecTV gained 53 percent more subscribers when compared to last year's second quarter, company officials pointed out during their quarterly conference call held Monday.

DirecTV President Roxanne Austin and others said DirecTV should still meet its year-end net subscriber goal of 1.2 million. DirecTV also increased its forecasts for a number of key financial categories, jumping year-end revenue estimates by $100 million to $6.3 billion and EBITDA forecasts to the $525 million/$545 million range.

As for the pending DBS merger, Hughes executives said they continue to answer questions from regulators in Washington, D.C., about the transaction, and they continue to expect the deal to close before the end of the year. Hughes and DirecTV are trying to merge with EchoStar in a $26 billion deal.

From SkyReport (Used with Permission)

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lee635

· #2 · Jul 16, 2002

I read somewhere that D* dropped their lowest tier service for new subs and increased the fee for existing subs. And that D* was surprised at the number of low tier subs who simply dropped the service.

Haven't seen any conjecture as to how the additions of local market have played into this, any insights anyone?????

I can't tell you how many businesses I've seen that made the lion's share of their profits from a small percentage of customers. Of course when you shed all those low ball customers, it may allow a competitor to enter your market. So you run a risk that this scheme may backfire. Also, once you lose a customer, you may lose other sales opportunities that didn't know even existed. The key seems to be figuring out to extract a small margin off the low ball customers while not spending too much effort to keep these customers happy.

Casinos seem quite adept at spending the right amount of effort on each customer....

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Karl Foster

· #3 · Jul 16, 2002

"I read somewhere that D* dropped their lowest tier service for new subs and increased the fee for existing subs. And that D* was surprised at the number of low tier subs who simply dropped the service."

While it is true that they dropped the Select Choice programming pier, the cost of Total Choice did not go up. It is still $31.99 ($37.99 w/locals) - and has been for quite a while. They added another tier called Total Choice Plus for $35.99 (or $39.99 w/locals) and dropped the Family Pack (those stations were incorporated into TC+) that was $5.00. My subscription actually went down to the following:

Before Rate Change:

Total Choice, $31.99
Family Pack, $5.00
Locals, $5.99
2nd receiver, $4.99
3rd receiver, $4.99
Ultimatetv, $9.95
Total, $62.91

After rate change:

Total Choice Plus w/locals, $39.99
2nd receiver, $4.99
3rd receiver, $4.99
Ultimatetv, $9.95
Total: $59.92

I think that the addition of many local markets for both D* and E* will play favorably for both companies in the 3rd and 4th quarters. I also believe the downturn in the economy has affected them as well.

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lee635

· #4 · Jul 16, 2002

That's a pretty rich package for my tastes. We have AT50+locals+supers+Showtime+Dishplayer.

AT50 $23
Locals+supers 8
Showtime 12
second rec. 5
Total 48

I think that's how much it is. Might be off by a dollar or so. So you're into the sixty dollar a month range and you haven't even added a pay channel yet. Ouch. I'd like to drop to an even lower basic package and add Starz or HBO. We only watch a few of the basic channels, mostly news anyway.

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Steve Mehs

Discussion Starter · #5 · Jul 17, 2002

Select Choice is still around, if you get the right csr....

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Karl Foster

· #6 · Jul 17, 2002

You are right. I pay $60 per month, but I have 130 stations, a standard receiver and two kick-butt PVRs. I feel that I am receiving a good value for my dollar. Digital cable for a similar package is around $55-$60 for a fairly basic package (if digital was even available for me, which it isn't). The stations that we watch on a regular basis are only on the Dish Top 150 plan - National Geographic, Biography, Discovery Wings, and Discovery Civilization. With that package, I'd be into it about what I am now ($40.99 for T150, $5.99 locals, $9.98 for additional receivers) and have to shell out $549 for a dual-tuner PVR.

Believe me, $60 per month is not a lot compared to people who have a lot of premiums, buy NFLST, MLBEE, etc. Like I said, I feel I get good value for my dollar. I wish I could afford TC Premier, but I don't want to spend $100 per month for tv.

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lee635

· #7 · Jul 18, 2002

Easy now my friend. You have what you like. That's a good thing.

But we like the movie channels, so I want the least cost basic tier to get me access to movie channels. I hate that about cable -- many are now requiring you to buy up to the digital package before you can get a movie package. Well, we don't watch many of those basic channels. Anyway, thanks for the info.

Originally posted by karl_f
You are right. I pay $60 per month, but I have 130 stations, a standard receiver and two kick-butt PVRs. I feel that I am receiving a good value for my dollar. Digital cable for a similar package is around $55-$60 for a fairly basic package (if digital was even available for me, which it isn't). The stations that we watch on a regular basis are only on the Dish Top 150 plan - National Geographic, Biography, Discovery Wings, and Discovery Civilization. With that package, I'd be into it about what I am now ($40.99 for T150, $5.99 locals, $9.98 for additional receivers) and have to shell out $549 for a dual-tuner PVR.

Believe me, $60 per month is not a lot compared to people who have a lot of premiums, buy NFLST, MLBEE, etc. Like I said, I feel I get good value for my dollar. I wish I could afford TC Premier, but I don't want to spend $100 per month for tv.

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Karl Foster

· #8 · Jul 18, 2002

Lee,

No offense intended

I've got nothing but love for E* subs. All of my siblings, my wife's siblings and my parents all have E*. I am definitely the black sheep in the family. All of my neighbors have E* as well. I've actually had a neighbor ask me how I get any signal with my dish pointed to the SE instead of due south. I'd venture to say that in my area E* outsells D* 10 to 1.

Have a nice day!

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