News Corp.'s Carey Supports Retail, HDTV
By Greg Tarr -- TWICE, 5/21/2003
New York - Retailers will continue to play an important role in taking DirecTV to its next level of growth under News Corp. stewardship.
That was the vow of Chase Carey, a News Corp. executive who is in position to become the next president and CEO of DirecTV-parent Hughes Electronics once News Corp.'s acquisition of the satellite company receives regulatory approvals.
Carey, who was a keynote speaker at the Satellite Broadcasting and Communications Association (SBCA) SkyForum seminar, laid out plans for the nation's largest direct broadcast satellite (DBS) company, that showed New Corp. following closely the practices implemented by DirecTV's existing marketing team.
He added that News Corp. would bring an 'entrepreneurial spirit' to the company that would foster 'passion, energy and decisiveness.'
Dismissing speculative reports that News Corp. would have DirecTV focus on direct sales at the expense of retail distribution, Carey said retailers are in the best position to qualify committed consumers and reduce churn, and will continue to be a significant factor in the growth of DirecTV.
Carey said News Corp. and DirecTV 'will learn a lot from each other,' in running a successful direct-to-home satellite operation. News Corp.'s BskyB European satellite venture lists remarkably low churn levels of under 1 percent per month.
Carey added that DirecTV would look to 'significantly expand the number of local markets' into which it offers local-into-local television services, adding that addressing all 210 markets 'is not beyond the realm of possibility.'
The company will look to expand its satellite capacity with Hughes' Ka-Band SpaceWay technology, and other new spectrum-efficient technologies, he said.
Carey also dispelled notions that DirecTV would not support HDTV programming. He said DirecTV would look to expand the number of HD channels it offers to compete with the challenge of digital cable services, and will look to increase the penetration of DirecTV decoder boxes with digital video recorder capability as a key subscriber retention tool.
For the future, he said, DirecTV is interested in deploying a 'whole house, multi-room solution,' as along as the price makes sense to consumers.
Carey said DirecTV's 'greatest growth opportunities lie ahead of it and not behind,' adding that DBS penetration should reach 30 million homes by the end of the decade. DirecTV, which will celebrate its 9th Anniversary next month, currently lists over 11 million subscribers.
Regarding Hughes' assessment of rural market DirecTV programming distributor Pegasus, Carey said no decisions would be made before the close of the acquisition. Some have speculated that DirecTV may ultimately acquire Pegasus' DBS business, but Carey vowed the new company would make 'informed but not emotional decisions.'
'News Corp. is in line with DirecTV on this situation, and will only be supportive of a transaction that's fair to shareholders,' Carey said.
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