DirecTV's Summer 2012 Dispute With Viacom Dents DirecTV's Subscription Numbers

From C21Media:

Viacom row dents DirecTV subs

DirecTV has blamed its high cancellation rate during the third quarter of this year on its contract dispute with Viacom, which led to more than 20 channels removed for nine days this summer.

The satellite platform saw its US revenues for the three months to September 30 increase 6% year-on-year to US$5.77bn, up from US$5.42bn.

It attributed this to a larger subscriber base, which grew by 67,000 customers during the period. However, this was down from 327,000 in Q3 2011, a drop the company said was “due to lower gross subscriber additions as well as an increase in the average monthly churn rate.”

DirecTV’s quarterly financial statement released yesterday added: “The higher churn rate in the quarter was principally driven by a contract dispute with a large programmer that resulted in the removal of several channels for nine days in the third quarter.”

Viacom’s 26 channels, including Nickelodeon and MTV, were pulled by DirecTV for nine days in July following a row over carriage fees until a new deal was agreed later that month.

And this led to a higher-than-expected cancellation rate of 1.74%, up from 1.62% for the same period last year.

DirecTV now has a US subscriber base of 19.98 million, up from 19.76 million this time last year.

Meanwhile, DirecTV Latin America drew revenue of US$1.58bn for the third quarter, up from US$1.36bn year-on-year.

It also saw a subscriber increase of 543,000 for the three months to September 30, though this is down from 574,000 for the same period last year. The service now has 9.67 million subscribers in total, up from 7.28 million.

The platform’s Latin American business includes 93% of Sky Brasil, 100% of PanAmericana and 41% of Sky Mexico, though the latter operation is not included in these figures. When Sky Mexico’s 4.88 million subscribers are taken into account, DirecTV Latin America’s business extends to 14.55 million customers.

Overall, DirecTV’s revenues for the quarter rose 8% to US$7.42bn year-on-year, with net income of US$565m, up from US$516m.

DirecTV is currently in production on its first original scripted series, Rogue.

Michael Pickard
07-11-2012
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