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DirecTV Succeeding With Little Retail Help

New York — DirecTV CEO Chase Carey told investors during a Lehman Brothers Wireless and Wireline Conference Thursday that DirecTV has maintained an HD leadership position largely through its own marketing and sales initiatives and service delivery, with little reliance on CE retailers to push it as an attachment to HDTV set sales.

When asked if DirecTV has been able to use its leadership in HD to win over new HDTV set purchasers in CE retail stores, Carey said: “We have successfully executed and established ourselves as the leader of HD. The actual sales that still come through the consumer electronics channel [are] pretty small, so you do have to measure it in a broader sense. We’ve done a lot of research about it and I think we execute it well. We deliver the product. I think we communicated it well. I think the marketing campaigns were and continue to be ones that really set us apart.”

The assessment comes at a time when cable, telco TV and Dish Network are stepping up efforts to win over new HDTV owners, with claims of HD channel offerings approaching the level of DirecTV’s service.

Carey said DirecTV has competed successfully against cable in national adoption using the uniformity of its service and offerings across the country, compared to widely varying service levels between cable operators and territories.

He said DirecTV will continue to build on both the breadth of HD service and on unique HD and interactive service offerings. Carey cited the company’s large selection of sports channels and content in HD, some of which is exclusive to DirecTV, and a plan to air as video-on-demand offerings new episodes of the acclaimed TV series “Friday Night Lights” months before they appear on the NBC’s regular network broadcast.

Carey reminded that DirecTV’s recently launched satellite will enable expanded local and national HD capacity beginning in August, keeping the satellite provider one step ahead of competitors in cable, satellite and telco TV, despite claims that some have made to having achieved an HD leadership position.

“It’s one thing to say we are going to have this stuff — it is another to go out and execute. I think it is going to take time, not that our competitors aren’t going to continue to get better. I think our challenge inside HD is to continue to improve and to build.”

Carey said that cable and telco providers continue to have an edge in bundling triple-play services, including broadband, but DirecTV has actively sought methods ensuring subscribers have access to broadband through various initiatives. He added that consumers are becoming more savvy about the true costs associated with many of the competitive packages over the long term.

Regarding competition from telco TV providers, Carey acknowledged that Verizon has been aggressive in launching its FiOS TV offering with HD in new markets, with expensive promotional incentives and giveaways, but he showed little concern that the practices will have any significant impact on DirecTV’s new subscriber pace, adding that such activities are ultimately unsustainable.

Going forward, Carey said DirecTV expects to continue to reap the benefits of its HD DVR product, and pointed to plans to offer a whole-home solution starting later in the year.