Leading direct-broadcast satellite provider DirecTV Inc. last week named a former phone-company executive, Odie C. Donald, as president, succeeding Eddy Hartenstein.
DirecTV parent Hughes Electronics Corp. had been looking to fill the position since January, when it promoted Hartenstein to DirecTV global chairman.
A DirecTV spokesman said Hartenstein hand-picked the new president after narrowing the field to a handful of candidates.
"We looked high and low across a variety of industries," Hartenstein said during a conference call last week, adding that the time spent in finding Donald "was well worth the wait."
Donald spent 25 years with BellSouth Corp., including a stint as president of BellSouth Mobility, the regional Bell operating company's cellular-telephone division, from 1992 through 1998. Before joining DirecTV, Donald was CEO of Cable & Wireless Communications plc for the Caribbean and Atlantic Islands.
Donald told reporters his top priorities in his new role are to continue DirecTV's strong subscriber growth, to focus on profitability and to put more emphasis on customer service.
DirecTV has already alleviated the customer-service problems it faced last summer, when heavy call volumes left many subscribers waiting on hold, Hartenstein said. He added that the company needs to strengthen its customer-service-representative and retail training as it introduces new multimedia services this summer.
Donald said he sees room for DirecTV to improve on its customer service. "There's a tremendous team here," he added. "Together, we'll find a way to do better."
But Donald said he saw more strengths than weaknesses in DirecTV, referring more than once to the company's status as an industry leader and noting that he has been a DirecTV customer himself for four years.
Asked about the growth potential left for DBS, Donald replied, "I can't see any limitation right now. That was one of the draws for me-there's a lot of growth ahead."
Hartenstein said heavier-than-anticipated subscriber growth could actually slow profitability in the near term. He added that because of the high monthly revenue per subscriber the company sees and the degree of "stickiness" among its customers, it makes sense for DirecTV to continue to invest in subscriber growth.
One way to increase monthly revenues is to add new broadband services. To support such initiatives, Hughes announced the promotions last week of two key DirecTV executives.
Executive vice president of new ventures, advanced products and programming Larry Chapman was named president of the newly created DirecTV Global Digital Media Inc. unit, which will focus on television-based broadband services such as those from America Online Inc.'s "AOL TV," TiVo Inc. and Wink Communications Inc. Chapman reports directly to Hartenstein.
Executive vice president of sales and distribution, marketing and customer service Bill Casamo added the role of DirecTV Merchandising Inc. president. In addition to DirecTV, Casamo will add merchandising responsibilities for Hughes Network Systems' DirecPC high-speed Internet service. The company expects to introduce a two-way DirecPC service this year. Casamo reports to Donald.
"Donald is a good addition to the team," Tellus Ventures Associates president Steve Blum said. "He brings skills and experience that fill critical needs for DirecTV, and he gives the entrepreneurs a chance to reinvent themselves."
Hartenstein called Donald "the right guy to take the operational reins."
But Donald noted that releasing those reins won't be easy for Hartenstein, who has taken the company from its start-up phase a decade ago to one that serves more than 8 million subscribers after less than six years in operation.
"I imagine it's something similar to giving up your firstborn," Donald said, adding, "We'll work closely."
Industry analysts don't expect Hartenstein to take a low profile in his new position. "The general consensus is that Donald is there to run the company, not to replace Eddy," Blum said.
Donald was not widely known inside the multichannel-video industry before last Monday's announcement.
Hiring a Hollywood mogul might have drawn more splash, Alpert & Associates president Mickey Alpert said, but it wasn't necessary because DirecTV has been successful in striking programming deals already.
"They need someone who understands how to run a consumer business," he said, "someone who's been responsible for many [profit-and-loss] units."
Donald's experience in large-scale customer-retention efforts is important, Alpert said, adding, "As you get more and more customers, you're going to want to keep them."
The new president's lack of video experience did not seem to raise many eyebrows last week. "This industry is not that complicated, and he's got Eddy behind him," Alpert said.
Donald's cellular experience brings useful experience to the DBS world, others said.
"Obviously, cellular is a very competitive, marketing-driven business, so that background is an advantage," Cable & Telecommunications Association for Marketing president Char Beales said, adding that the cellular-phone business also has a retail-sales component.
"My guess is that 75 percent of the skills he brings from the cellular-phone business are transferable to DBS," said Atlantic Cellular president Charlie Townsend, a one-time cable-television executive in Providence, R.I.
"Both are monthly businesses, and you have to know all about churn," Townsend said. "My guess is that he'll find the transition to DirecTV fairly easy."
Satellite Broadcasting & Communications Association president Chuck Hewitt said last week that the SBCA welcomes Donald aboard and "will do anything we can to make his transition as easy as possible."
B.G. Marketing Inc. president Barbara Sullivan knows Donald from the days in the early 1990s when both worked in the cellular industry, before Sullivan was recruited to run EchoStar Communications Corp.'s marketing department.
"He is such a victory for DirecTV," Sullivan said. "On a scale of one to 10, he's a 37."
T. Howard Foundation executive director Cynthia Dinkins said she was "ecstatic" to hear that the position went to Donald, who is African American.
"It's a very positive move in the right direction," Dinkins said, adding that it reinforces the foundation's position-along with that of other organizations, such as Women in Cable & Telecommunications and the National Association of Minorities in Communications-that "we do have a pool of highly qualified candidates who are people of color and women."
Dinkins said she hopes that once he gets settled in his new role, Donald will become actively involved in the T. Howard Foundation, which advocates diversity in the satellite-television industry.