Tuesday June 1, 2010 – Antonette Goroch
Though both EchoStar and DirecTV saw subscriber gains in 2009, both are forecasting slowdowns in new subscriber additions for 2010, driving home the point that DTH satellite as a pay TV platform in the U.S. is clearly established and mature. It’s been years since anyone called DirecTV Death Star, as it was nicknamed by nervous cable ops upon its launch in 1994, and both Dish Network and DirecTV now rank in the top five U.S. pay TV operators. Today they have become the old guard and are no longer the feisty new kid on the block.
This maturation signals a new era for DTH satellite operators in the U.S., requiring a new mindset. No longer can they rely on the low hanging fruit of dissatisfied cable customers to achieve exponential annual subscriber gains as they did throughout the nineties and into the early 2000s. Most likely to have made the “switch” to DTH satellite already have, and cable operators have worked hard to achieve parity through better service (remember the days of waiting for a cable installation that would come sometime between nine and five?), triple play offerings, HD, VOD and now 3D. Added to this, they—along with cable operators—face new competitive threats from both IPTV pay TV operators like AT&T and Verizon, and over the top providers like Netflix or VUDU.
Both operators have responded to this shift by focusing on increasing ARPUs on existing subs through such means as more premium offerings, HD and on demand, and their respective financials show success in this regard. Perhaps more promising in terms of growth is that both operators have increased their international efforts, seeking newer, less mature markets. DirecTV recently consolidated its Latin America efforts and has seen impressive subscriber gains in the last couple of years in Sky Latin America. EchoStar, meanwhile, aggressive as ever, has increased its international presence through joint ventures in Mexico and Taiwan over the last two years.
Even with such moves, it is unlikely that DTH satellite will ever again see the rapid gains it saw a decade ago. Today’s challenge lies far more in just holding the ground it has so successfully attained.
