White: SVOD, OTT Opportunities for DirecTV

CEO Says Satellite Giant Looking at Niche Offerings

DirecTV chairman and CEO Mike White told an audience of analysts and investors at its annual Investor Day in New York that the satellite giant is looking into subscription video on demand and over-the-top technologies, particularly those targeted at so-called “millennial cord-cutters.”

DirecTV has shown interest in the SVOD and OTT space in the past – it was one of the bidders for online video pioneer Hulu earlier this year. Hulu decided in July to call off its auction and reinvest in the company. But White said at the investor meeting he believed DirecTV could have brought some unique things to the Hulu party, including leveraging its subscriber base in Latin America and the U.S., and possibly adding to its kids’ offerings

The DirecTV chief said it is still premature to say how the satellite giant will address the OTT space. “Over the next three years we are looking at electronic sell-through, SVOD, and over-the-top ideas.”

He added the main hurdle to an OTT product was not technological.

“The technology is not the challenge,” White said. It’s the [programming] rights landscape.” “I’m optimistic that probably over the next 12 months we will have more to say about that, in terms of or first priorities. We think it’s an opportunity.”

White estimated that about $5 billion in revenue is being spent in that area and is expected to grow, especially among so-called “millennial cord-cutters,” younger viewers who access more and more entertainment online.

While White sees a business in OTT, he isn’t so sure about putting an app for the top SVOD provider, Netflix, on his set top. The Netflix app was a hot topic in October, when Netflix CEO Reed Hastings said he would like to see the app on the set-tops of top video service providers like Comcast.

White said that about 30% of DirecTV subscribers currently subscribe to Netflix as well and it would not be technologically difficult to embed a Netflix app on DirecTV boxes.

“If the consumer demands it, we’ll be there,” White said, adding that customers so far aren’t. “It’s not necessarily in our interests to undermine our Pay-Per-View movie business where we make nice margins in order to help Reed out.”

White said DirecTV also is in active discussions with the National Football League regarding renewing its NFL Sunday Ticket deal, which expires at the end of the 2014 football season.

“We have had very, very constructive conversations with the NFL,” White said. “I am very optimistic we will get an exclusive deal done with NFL Sunday Ticket. We still have a whole other season to go.”