When reviewing DirecTV’s 4Q08 numbers, you have to wonder if the fuss about the triple play is overblown. After all, DirecTV is thriving, with no broadband or voice component. They added 301k net new subscribers – their best in three years – in 4Q08. At first glance, I wanted to attribute their good fortune to their telco distribution partners, including Qwest, Verizon, and most recently AT&T (the AT&T partnership didn’t kick in until late in 2009), all of whom are using DBS video in triple play promotions. But according to DirecTV Group CEO Carey Chase “telco’s [sales] in the fourth quarter were down.” DirectTV is relatively coy about revealing channel contributions to their sales figures in financial reports. Chase gave more credit to direct sales and other retail sales channels for their 4Q08 sales success. Given the economy and lack of a triple play offering, DirecTV’s results appear impressive. Analysts were only predicting 244k net new subscribers. DirecTV now has 17.6 million total subscribers. They also report just over half of their new subscribers are also subscribing to either HD or DVR.
DirecTV thinks there holding their own against competitors, including telco TV players. “… we added about a 150,000 more subs in Q4 than Q3, while the telco’s combined increase was only about 100,000 subscribers. This continues the trend we’ve seen in recent quarters, where the telco market share gains appear to be coming at the expense of cable companies and DISH Network,” said DirecTV CFO Pat Doyle on their earnings conference call. While this success represents a single quarter, it is still illustrative of DirecTV’s relative success against cable and telco threats, both of whom have a triple play ‘advantage.’ DirecTV continues to prove that the triple play is by no means bullet proof, and a determined competitor can more than hold its own against it.
