Does Verizon Want DirecTV?
Just after the markets closed on Friday DirecTV posted a story to it’s website suggesting that Verizon could be interested in acquiring DirecTV.
Without knowing any details then I thought about the possibility and figured that it would make sense for Verizon in fact the more I thought about it the more it made sense.
I decided to do some digging and found out some very interesting rumors that are going on behind the scenes at Verizon with the biggest one being that Verizon could be wanting to split the company up into separate pieces by the end of the year. One of the pieces could be known as Verizon Entertainment Services, this company would be the home of FIOS, and in addition could also be the new parent company of DirecTV. I have also heard that VES could make their FIOS service available to other telco providers across the country.
By Verizon acquiring DirecTV they could almost immediately bring down the costs on their FIOS service for things like programming contracts, all programming could be negotiated for both FIOS and DirecTV under one umbrella.
One could wonder if by Verizon acquiring DirecTV if it would earn a “get out of jail for free” card from Tivo. Tivo recently sued Verizon for its DVR’s patents. However DirecTV has an agreement with Tivo and one can only wonder if that contract will also carry over to Verizon.
But what about all the rumors about AT&T wanting to buy DirecTV?
Many industry folks figured that AT&T would be the company who would ultimately acquire DirecTV. In my digging around I talked to a few insider contacts at AT&T who told me some surprising news, in fact two of them told me the same thing and that was they would probably have been better off if they would have remained with Dish Network as their satellite partner. I am told that the initial move to DirecTV looked like it was a great move, but now the amount of DirecTV sales have declined and they are not getting the response that they were hoping for from signing up new DirecTV customers.
Interesting times are ahead, I am sure this will not be all we hear of this rumor. In fact I think this one could quickly gain tractions.
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Confused commented:
I'm not sure why Verizon would want to buy any television service. Let me place a 'bold' prediction here. In 10 years, the internet in this country will be fast enough and cover most of the United States to make Hulu, Netflix (streaming) and other on demand internet services the prime source of household entertainment. For Verizon to pay $50 billion to buy DirecTV when their 4G wireless is supposedly fast enough to support these on demand internet services is idiotic at best. They would be better off instead coming out with a 4G entertainment center box with full web browser / HD support. I for one would take the $100 I give to DirecTV and give it to Verizon every month if they did this.
Davis Freeberg commented:
A couple of problems with your theory. First, I don't think that it would be that tough for Verizon to get rid of lawsuit by TiVo. TiVo said that they offered them a deal and only sued after Verizon made it clear that they weren't at all interested. Control of some of DirecTV's patents might make TiVo think twice, but since TiVo is currently licensing them from DirecTV I'm not sure how Verizon uses it as a weapon. Perhaps even more importantly though are the change in control provisions that are in TiVo's DTV contract. I'm pretty sure that in a buyout situation, the party not being bought out, can revisit the relationship and cancel the contract if they wish. This means that even if DTV was a silver bullet, TiVo could get rid of it if they wanted.
RAD commented:
"Just after the markets closed on Friday DirecTV posted a story to it’s website suggesting that Verizon could be interested in acquiring DirecTV."
Scott, I can't find this post on the DirecTV web site, do you have a link?
Shield95 commented:
I hope DirecTV can become a good
company again.
