September 18, 2008

Dish Talk: DirecTV Banking on Video, Fretting over DOCSIS 3.0

It wasn't too long ago that DirecTV's management team was feeling the pressure to come up with some sort of wireless solution. But that weight has been lifted with Liberty Media taking over News Corp's stake in the satellite company. "We suggested that claiming you need one, which pushes you to do a WiMax deal that you may not really want to do but makes a good press release, isn't necessarily the long term, correct strategy," Liberty Media pres/CEO Greg Maffei said at Goldman Sachs ' investor conference Wed. But does DirecTV really need some sort of broadband offering? "I think we've absorbed most of that triple-play threat...the reality is over half of our customers at DirecTV have high-speed access. They're able to find either best of breed or bundles we help them find to be competitive," he said, adding that video is seen as the most important part of a bundle. "I don't think there is an opportunity for us realistically, easily to go out and create our own broadband solution." So DirecTV's general strategy will be partnerships, such as its deal with Verizon. Nonetheless, he told the crowd a marketing deal with AT&T, which is up for grabs at year-end, isn't a necessity since the company has done fine without. Concern over DirecTV's broadband vulnerability is partly why News Corp got out of the business. "I was frightened of the triple-play from cable and the [telco rollout]," News' Rupert Murdoch said earlier in the day at the conference. "I thought it was going to be more affected by the triple play than it has been. I might have been wrong. I don't think I'm wrong in the long term, but in the short term, it certainly hasn't been as hurt as I thought." While Maffei enthused that DirecTV's HD lineup is fending off the triple-play, he admitted disappointment at cable's 3Q HSD gains, though he said he thinks telcos will come back. "It is a little scary to think about DOCSIS 3.0 and what cable will do," he said. "But I think it will end up probably being more judicious in their capital application for DOCSIS 3.0 than some have stated, and that will probably mean the rollout will be slower and the opportunities are better for us." Asked whether he expected to keep NFL Sunday Ticket when the deal comes up for renewal in '10, Maffei said: "I think we'll continue to be a sports leader for a long time, and I think the NFL will be a part of that."