So why is AT&T rumored to be buying DirecTV in a deal estimated to be worth $50 billion? To hear USAToday tell it
, it's because AT&T wants to bundle satellite TV service with DSL in areas they don't sell U-Verse TV, but somebody apparently forgot to tell the news outlet that AT&T is busy hanging up on most of these users
because they don't want to upgrade them, making that theory less likely.
Perhaps they're just really excited to get into the satellite TV business? Except the satellite business isn't a high growth market, it's a highly saturated market meaning no real subscriber growth in TV user additions in the foreseeable future.
Even investors, traditionally always hungry for a good M&A, don't really understand what AT&T's doing. Craig Moffett, who we've historically made fun of for his unabashed love of usage caps and hatred of network investment, tells Bloomberg News he doesn't really see the point in the deal
noting that satellite is a no-growth business.
"We believe AT&T is better served preserving its balance sheet for upcoming wireless auctions, and continued investment in next generation wireless and wireline products," Jefferies analyst Mike McCormack also states in a report.
So what is AT&T really doing? Well for one, the company hasn't officially announced anything so this deal may never happen. But being AT&T, the most likely explanation is that, like T-Mobile, they're spending big money in order to eliminate a pay TV competitor from the market, and trying to grow simply for the sake of growing. It's not like that money needs to go back into the company's wireless or fixed-line networks, right?
With all the quarterly earnings reports in, telecom analyst firm MoffettNathanson notes that the Pay TV industry lost about 113,000 subscribers on the quarter
. Cable operators lost 687,000 subscribers in Q3, and while telcoTV and satellite providers added 574,000 subscribers, it couldn't prevent the industry from seeing a net loss -- attributed to the slow and small but steady growth of cord cutters.
The TV content blackout resulting from Time Warner Cable and CBS's retransmission fight
is impacting more than just Time Warner Cable customers. While Bright House Communications and Time Warner Cable are separate companies, Time Warner Cable is leading the negotiations for both companies (they both used to offer service under the Roadrunner brand), meaning that Bright House customers in our forums are complaining that they're not getting CBS channels like Showtime
either. Dish and DirecTV customers are being impacted by the fight as well
, given CBS has blocked Time Warner Cable customers from accessing CBS content online, and both satellite companies bundle Time Warner Cable broadband service in some markets.
Cablevision has joined DirecTV
in charging a new "sports surcharge" that places the costs of offering regional sports networks into a below-the-line fee. The new $2.98 a month fee will begin showing up on subscriber bills beginning in April.
DirecTV's offering a new satellite broadband bundle the company hopes appeals to rural users, though it suffers from the bane of all satellite broadband: annoying usage caps. We've known since May
that DirecTV would soon be selling ViaSat's Exede satellite broadband service, and now we're getting a good look at some of the bundle pricing DircTV is offering.
Two new J.D. Power and Associates studies note that customers on pricier cable tiers claim they're more satisfied, while DSL users complain their connections aren't keeping pace with modern household bandwidth demands. story continues..
Following on the heels of continued cable subscriber losses at Comcast
and Time Warner Cable
, DirecTV's earnings
out today indicate the company saw their first ever net loss in TV viewers. DirecTV lost 52,000 subscribers during the quarter, which was significantly more than analyst expectations. In their earnings call, DirecTV blamed stricter credit policies and its focus on higher paying subscribers for the decline (just don't mention cord cutting, whatever you do). Just like Comcast and Time Warner Cable the customer dip isn't hurting DirecTV's wallet just yet, with the company still seeing a 7% revenue jump of $5.65 billion, and a net profit of $604 million.
Several DirecTV users have written in to note that they're being informed of yet another round of rate hikes. An e-mail to users in several markets (you can let us know if you're impacted in the comment section below) informs them they're seeing rate hikes of around 4% on upcoming bills. "This year, the programming costs we pay to owners of TV channels will increase about 10%, but we have chosen to adjust the prices our customers pay by an average of only 4%," the e-mail informs users. "On February 9, 2012, new pricing will be applied to DIRECTV programming packages and services." Most programming packages will see $3 to $5 increases, while DVR rental rates are expected to increase anywhere from $1 to $8 a month.
Dave Zatz points out
that DirecTV is circulating a survey among subscribers asking if they'd be interested in a Netflix-esque streaming video service. "The service would allow you to stream thousands of movies and television shows over a broadband internet connection to your television, computer or tablet," suggests the survey. Though they've failed a few times at doing so in the past
, DirecTV doesn't offer broadband service, meaning you'd just be streaming the service over another company's broadband connection. As we exclusively reported earlier this year
, DirecTV is working on a fixed LTE residential service with Verizon, though we're guessing the usage caps wouldn't play nice with such a service.
We mentioned this was coming last year
, and now DirecTV is the first of several cable TV companies that plan to try and narrow the theater to VOD release window by offering films just 10 weeks after a film's theatrical release. However, that expedited release date is going to come at a steep premium many consumers won't be willing to pay. According to Bloomberg
, DirecTV will offer a 48-hour rental of Sony's "Just Go With It" for $30 -- ten weeks after the film premieres in theaters. The Studios are hoping to lessen the impact such services have had on DVD sales -- but that whopping $30 price tag suggests they remain somewhat out of sync with consumers. The films are only available to DirecTV customers with high-definition tuners equipped with digital video recorders, and the films will be available in two week windows.
Back in 2003
, the state of Ohio decided to pass a law that required satellite companies pay a 5.5 percent sales tax, though the law excluded cable operators -- who pay local franchise fees ranging from 2 percent to 5 percent. The state has collected about $44 million a year since imposing the tax, and satellite operators have been fighting the tax every year since. DirecTV and Echostar sued to have the taxes overturned, arguing that the tax amounted to local cable protectionism, since cable operators had local physical presences. The Ohio Supreme Court this week voted 5-2 against Echostar and DirecTV
, Justice Terrence O'Donnell declaring the tax "does not favor in-state interests at the expense of out-of-state interests."
DirecTV has settled a lawsuit claiming the company has been engaged in misleading marketing practices. Specifically, DirecTV was accused of failing to clearly disclose limitations on advertised prices, failing to clearly disclose contract terms, extending user contracts covertly when replacing defective equipment, promising "cash back" but instead delivering bill credit, and burying misleading fees below the line. story continues..
Back in September you might recall we directed your attention to some exclusive, leaked photos
from a user in Pennsylvania, who claimed to be participating in a beta test of a new broadband delivery service. According to the user, the technology somehow integrated Verizon LTE service -- but was being installed in conjunction with DirecTV. Verizon, as you might expect, wouldn't comment when we asked them for detail. Fast forward to this week, and a report in Investors Business Daily
proclaims that Verizon and DirecTV are cooperatively testing residential LTE broadband service:
Verizon is providing broadband Internet service to a small number of Erie homes via its 4G LTE network.
DirecTV recently announced they were going to allow users who don't subscribe to DirecTV to get NFL Sunday Ticket streamed via broadband
for $350 a season. Unfortunately there's a catch: you have to be unable
to get DirecTV service, via line of site obstruction, a horrible architectural disfigurement, or some other caveat.
Satellite and telcoTV providers have long been annoyed with the fact that some cable companies withhold access to cable-company owned regional sports channels. In New York, Cablevision withholds access to the channel from competitors like U-Verse, Dish and FiOSTV in order to prevent sports fans from migrating. story continues..
Alcatel-Lucent has dropped us a line to note that the company has partnered with DirecTV for what they're calling an "industry first": delivering DirecTV video services via VDSL2. According to the company, they've partnered with DirecTV to use existing phone wires to help deliver video in the 1,296-unit condo community of Shelter Creek in San Bruno, California. story continues..
We've already mentioned
that DirecTV was (like many other phone, cable and satellite TV companies) planning a suite of rate hikes starting in March, though specifics were hard to come by. The Orange County Register
notes that the rate hikes are actually arriving February 9, cover a number of DirecTV's programming tiers, and will result in customers paying from 4.5% to 60% more since 2008 -- and in most instances for the exact same service.
For years the rumor has floated out there that either Verizon or AT&T would buy DirecTV in order to have direct control of the company's satellite TV operations. Sometimes these rumors are based in conjecture, but more often than not they're based on nothing whatsoever
. With DirecTV prepared to get a new CEO (their last CEO just departed to be Rupert Murdoch's right-hand man at News Corp.), the rumors are apparently bubbling up once again. According to Reuters
, representatives from both AT&T and Verizon have
approached Liberty Media over the last few years about a sale, and the outlet cites sources who believe new CEO Michael White is little more than a "babysitter" until this endlessly-rumored deal can be accomplished.
Confirming one of the worst kept secrets
so far this year, DirecTV CEO Chase Carey is quitting his job at DirecTV
to return to News Corporation, where he'll be Rupert Murdoch's right hand man. Under Carey's watch, DirecTV renegotiated their exclusive deal with the NFL (the bane of cable and telcoTV viewers everywhere), led the industry in HD channel total and quality, and fused with Liberty Media. One notable thing Carey didn't
try to do was force the company back into the broadband business after several previous failed attempts
. Carey's new boss, Rupert Murdoch, hasn't had much nice to say
about DirecTV over the years, at one point calling the company "a turd bird
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