DirecTV chief not worried after Viacom spat

Michael White says only subscribers lost were 'low quality'

Though the Viacom-DirecTV dispute ended weeks ago, it’s still weighing on the minds of moguls who talked up its impact on earnings calls Thursday.

DirecTV chief Michael White cited the satcaster’s footprint of 20 million subs across the U.S. as a reason it ends up embroiled in so many of these conflicts. “We’ve had issues with several (content companies), as you know,” he said during a conference call with analysts. “Perhaps because of our size, we get picked on to reset the market.”

DirecTV posted higher profit and sales but experienced a dip in U.S. subs as a result of stiff competition from cable and telcos. The giant satcaster lost 52,000 U.S. subscribers, ending the quarter with 19.9 million.

While White said Viacom was responsible for causing some subs to bail, he said they were “low-quality customers” that won’t be missed.

“I think it would help everybody if our counterparts on the media side spend a little bit of time in our customers’ homes and see what’s happening with their income,” said White, continuing a war of words that has barely abated since the settlement.

Viacom yanked all its networks, from MTV to Nickelodeon to Comedy Central, from the satcasterover a bitter rate dispute after their contract expired. The two sides reached a deal in late July.

DirecTV is currently in talks with CBS Corp.; their current deal ends this year. On CBS’ own conference call, CEO Leslie Moonves hinted that retrans talks can be tough but go smoothly for the most part.

“We have done deal after deal without incident,” Moonves said. “That’s not to say we’ll never have a dispute.”

Asked about the process of determining fair rates, White said it’s “more science than art” because of the size of the billion dollar-plus, multiyear contracts. “We have an outstanding programming team, and we take a rigorous approach when we begin to prepare,” he said, citing data culled from set-top boxes, Nielsen and outside intelligence.

DirecTV saw its average monthly revenue per subscriber rise to $94.40 from $90.58. Net income rose 1.4% to $711 million. Revenue grew 9% to $7.2 billion.

DirecTV also said its Latin American biz remains strong, and the company added 645,000 new subs there.

Separately, Time Warner Cable said brisk growth in high-speed Internet offset a dip in video subscribers to boost profit. 

The nation’s second-largest cabler posted net income of $452 million, up 7.6% from the year before. Revenue rose 9.3% to $45.4 billion. It added 59,000 broadband and 45,000 phone customers in the June quarter. Broadband services revenue grew 14% even as the cabler lost 169,000 video subs.

Comcast revealed a similar dynamic earlier this week, highlighting a growing split between cable, which is growing broadband fast, and satellite, which doesn’t offer its own high-speed service. DirecTV’s White said that may not be a liability since more and more customers are taking standalone Internet service at competitive prices from cable companies, leaving them free to choose a video provider.

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