), the largest satellite TV operator in the U.S., has indicated
that it might introduce online video streaming services. However,
the initial offering will be at a much smaller scale than the
existing service providers
), Hulu and YouTube. Initially, the company will offer this
service for selected contents.
The U.S. pay-TV market is extremely competitive. In addition
to the traditional Cable TV and satellite TV operators, telecom
giants are also offering fiber-based high-speed video services.
In contrast, low-cost online video streaming services have also
become very popular especially when the economy is still reeling
under fluctuations. We believe that DIRECTV also needs to
restructure its business model and the decision to start online
streaming service is one such step. DIRECTV currently has a Zacks
Rank #3 (Hold).
In the second quarter of 2013, DIRECTV lost 84,000 pay-TV
customers in the U.S. compared with 52,000 in the year-ago
quarter. We believe satellite and cable TV operators are
gradually losing to telecom operators in the U.S.
Verizon Communications Inc.
) jointly gained 373,000 subscribers in the same quarter offering
fiber-based TV services.
DIRECTV has undertaken a three-edged strategy for the U.S.
market. These strategies include (1) streamlining its cost
structure through better negotiation with the content providers
(2) introducing TVEverywhere facilities, the multi-screen
streaming capability on mobile devices and expanding the
penetration of its Genie Whole-Home DVR and (3) focusing more on
becoming a premium brand in the U.S. pay-TV market, targeting the
high-end customers who are willing to pay for its costly HD-DVR
and interactive services and premium programs even during
DIRECTV (DTV): Free Stock Analysis Report
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