DirecTV thrives with richer customers
Targeting more affluent subscribers with digital video recorder (DVR) service is suiting the DirecTV Group. The company said its 2008 second-quarter revenue was up 16 percent from the second quarter of 2007, to more than $4.8 billion.
Net profit was essentially flat, up only incrementally from $445 million in the second quarter a year ago to $448 million in Q2 ’08.
DirecTV said it added a net of 129,000 subscribers in the quarter – essentially flat compared with last year’s second quarter. On the other hand, churn was down significantly, to 1.49 percent. ARPU was up 7 percent.
The reduction in churn was principally due to a continued focus on attaining higher quality subscribers and an increase in the number of subscribers with advanced services, DirecTV said. The company ended the quarter with 17.16 million U.S. subscribers, an increase of 5 percent compared with the 16.32 million subscribers reported at the end of the second quarter a year ago.
Net adds might have been better, but gross adds were down due, the company said, to being dropped by AT&T in the former BellSouth territories on April 1.
During the quarter, the company also bought $576 million of its own stock and conducted a $2.5 billion debt financing.
Chase Carey, president and CEO of DirecTV Group, said: “As we head into the second half of 2008, we are poised to extend our video leadership position as we significantly expand our industry-leading HD lineup with the launch next week of more than 30 new channels, bringing our total HD offering to 130 channels. In addition, we recently launched DirecTV On-Demand and our most popular promotion of the year linked to our exclusive NFL Sunday Ticket package. With these in place, we expect to build on the momentum established in the first half of the year to continue delivering strong financial results and substantial cash flow growth going forward.”
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