"Connected Home" to Drive DirecTV Growth


New York -- DirecTV's initiative to hook-up its customers' set-top boxes to the Internet - dubbed the "Connected Home" - could help close the gap in Pay-Per-View revenue between the satellite giant and cable operators, as well as boost what has been a surprising premium channel business, chief financial officer Patrick Doyle said at an industry conference here Tuesday.
Speaking at the UBS Global Media & Entertainment conference here, Doyle said the goal is to have about 40% of its set-top boxes connected to the Internet by the end of 2013. That connection, coupled with the satellite giant's DirecTV Cinema initiative, could give customers access to as many as 6,000 additional movie titles. At the UBS conference, Doyle said hat DirecTV has lagged in the pay-per-view category - he estimated that its PPV revenue is $2 to $3 less per month compared to cable operators - mainly because DirecTV has fewer movie choices.
Doyle estimated that it costs between $65 to $70 to connect a customer to the Internet - DirecTV is offering free installs to customers that buy whole-home digital video recorders or upgrade to HD-DVR service - but the payback is expected to be quick with a boost in average monthly revenue per unit and lower churn.
"They are stickier customers," Doyle said of connected homes.
Doyle added that connected homes also could help drive premium channel penetration, which was surprisingly strong for DirecTV, by enabling customers greater access to video on demand choices.
"That tends to energize paid premium revenue," Doyle said.