DirecTV Inc. missed its new-subscriber projections for the second quarter of
this year, signing 202,000 net new subscribers, short of the company's goal of
225,000 to 250,000, parent Hughes Electronics Corp. said Monday.
The good news: The subscriber gain was 53 percent higher than DirecTV's
second-quarter-2001 subscriber additions. The poor second quarter in 2001 led to
a shakeup in DirecTV's management last summer.
Monthly churn for DirecTV's second quarter rose to 1.7 percent, due in part
to a $3-per-month price increase in April on the company's lowest-priced
programming package for existing subscribers. The entry-level package was
eliminated altogether for new customers during the second quarter.
Subscriber counts were also impacted by DirecTV's move to a
product-certificate-based retail model at stores that had previously stocked the
'The sales will start to rebound in those stores this quarter,' DirecTV
president Roxanne Austin said in an earnings call Monday.
DirecTV's gross-subscriber additions in the second quarter of 2002, excluding
National Rural Telecommunications Cooperative markets, were 654,000. The company
ended June 2002 with 10.74 million DBS customers, 1.75 million of which were
The DirecTV acquisition boost that was fueled by Cablevision Systems Corp.'s
dispute with Yankees Entertainment & Sports Network slowed down somewhat
after the start of the baseball season, Austin noted. She added that she expects
baseball-related sales to pick up again as the pennant race heats up.
Average revenue per subscriber rose to $58.10 for DirecTV during the quarter,
due in part to heavy revenues from the latest Mike Tyson pay-per-view fight.
Austin said the company expects average revenue per subscriber to remain at
that level for the remainder of the year, driven in part by the start of the
National Football League's NFL Sunday Ticket programming in the third quarter
and the expansion of local broadcast markets on the platform.
Hughes chairman Jack Shaw told analysts the company was carefully reviewing
plans for underperforming units, such as DirecTV Latin America and
digital-subscriber-line provider DirecTV Broadband.
Shaw predicted that decisions would be made in tandem with the close of the
company's proposed merger with EchoStar Communications Corp. at the end of the