TOKYO — Leading Japanese direct-to-home satellite platform Sky PerfecTV emerged as the last satcaster standing in the world’s second-largest TV market as it announced Thursday that it would take over rival DirecTV Japan.
Under the deal, DirecTV would cease operations by year’s end while working to help its subscribers migrate to Sky PerfecTV. In exchange, DirecTV, whose main investor is Hughes Electronics, will purchase a 10.2% share in Sky PerfecTV, with Hughes holding a 6.7% share.
DirecTV will offer its subscribers free hardware to help them make the change while Sky PerfecTV will remove sub fees for customers who migrate to its service under the takeover deal.
Sky PerfecTV would reach its estimated breakeven point of 2 million subscribers under the merger deal. It would also be able to stretch its lead in the satcaster market over rival Japanese terrestrial networks that will launch new digital channels on a Japanese government satellite, which will go into operation at the end of the year.
As of the end of February, Sky PerfecTV had about 1.7 million subscribers, DirecTV had 414,000.
The takeover left about 500 DirecTV employees out of work and a sour taste in the mouths of many in top management who complained that senior Japanese execs were kept in the dark about DirecTV shutting up shop.
There are about 20 exclusive channels on DirecTV, and Hunter, along with Sky PerfecTV president Hajime Unoki, told a press conference in Tokyo that the two companies are working on a case by case basis to switch the webs to the new platform.
Sky PerfecTV, which has Rupert Murdoch’s News Corp., Sony, Fuji TV, Softbank Corp. and Itochu as its main investors, was planning to double its capital in March from the current 40 billion yen ($364 million) to $728 million. It is also planning an IPO on the Mothers section of the Tokyo Stock Exchange by March 31, 2001, in order to boost its capital base.