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Why DIRECTV's Sub Totals Keep Growing
By Swanni

Washington, D.C. (May 6, 2011) -- DIRECTV yesterday reported that it added net 611,000 customers worldwide in the first quarter, including 184,000 in the United States.

The wide majority of DIRECTV's sub gains came from the economically booming Latin America. But the satcaster's U.S. gains were also impressive in an environment in which some U.S. TV providers, such as Comcast, recently have reported video subscriber losses.

(DIRECTV also had a net gain of 289,000 subs in the 2010 fourth quarter; the satcaster now has 19.4 million subs in the U.S., a four percent increase from a year ago.)

Asked why DIRECTV has continued to add subs in the U.S., company CFO Patrick Doyle yesterday told Wall Street analysts in a conference call that the numbers "exceeded our internal projection."

Although DIRECTV has added fewer HD channels in the past two years, Doyle credited a strong interest in HD and/or DVR services in generating new subscribers.

"
Our percentage of gross additions taking advanced products was nearly 80 percent for the second consecutive quarter and over two-thirds of these subscribers signed up for both HD and DVR services," Doyle said.

In related items, DIRECTV said yesterday that:

* More than one million DIRECTV subscribers have now connected their set-tops to the Internet, which represents only about six percent of the audience. But the company hopes to reach the two million mark in 2011 and, eventually, 40 percent of the overall audience. The satcaster believes owners of connected set-tops will be more likely to order Video on Demand films available via Internet downloads.

* DIRECTV CEO Michael White refused to reveal early buy rates for the company's 'Home Premiere' VOD service in which near-theatrical films are sold for $29.99 each. But he said the company currently doesn't have any plans to change the price point or the time frame for when the movies are shown after they play in the theater. "We're pleased so far and we'll see how it goes."

* DIRECTV, which has been a big booster of 3D TV, launching four channels, acknowledged that the technology is still in its infancy.
"3D continues to be a part of the offering," said White. "We've got the N3D channel and I think you really need to see a lot more 3D television sets sold to build scale on that longer-term and it's still a relatively small percentage of our total subscribers that have 3D television sets.
"

In the conference call with analysts, DIRECTV executives did not mention any plans to add more HD channels.

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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

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