Digital TV Facts: The Latest

DirecTV is on track to deliver its new high-definition DVR this summer, according to CEO Chase Carey. While we await that upcoming HD-DVR, which supports MPEG-4 compression, the direct-broadcast satellite provider continues to distribute MPEG-2 TiVo models.

As DirecTV’s announced per-share earnings beat estimates this week, Carey called it “a solid quarter.” Some analysts were less enthused, noting an accounting change and a declining subscriber growth rate (which actually boosts short-term profit). Carey emphasized DirecTV’s success in attracting more profitable, “higher quality subscribers,” partly due to the up-front fees they now collect from “the high-risk customers.” Average monthly per-subscriber revenue is $69.75, up 6 percent. (Compare Time Warner Cable.)

The cost of acquiring one new subscriber now stands at $668, seemingly an eye-popping number, yet only $10-15 higher than targeted. With HD receivers and DVRs, hardware costs are up at the company. Carey acknowledged being “late on getting a DVR to the market.” Problems with early MPEG-4 receivers raised costs, and an estimated 10 percent of those boxes were returned. Carey said debugging has resolved the issues.

DirecTV continues to expand HDTV content, with HD transactions now double what they were first quarter last year. Local digital channels, including high-def, will be available in “close to three quarters of the country” by year-end, Carey said. Two new satellites to be launched next year will increase HD capacity. Over the next three years, he said, customers can expect to see “a pretty rapid migration of most of the successful channels” to HD, though he sounded dubious about the prospects for specialized, created-for-HD channels. While Prudential’s Katherine Styponias said rival Dish Network has “an arguably stronger high-definition offering that is likely to appeal to the high-end customer,” Carey maintains that DirecTV’s HD programming beats many cable offerings.

Speaking of rivals: While declining to speculate, DirecTV’s CEO would not rule out another attempt at a merger with Dish parent EchoStar. “I think there’s no question you’ve got a different regulatory environment,” Carey said.

• Links: Media Stock Blog, Forbes