New Hughes topper sees satellite biz boom

Carey, Hartenstein jazzed over DirecTV future

NEW YORK — No one can accuse Chase Carey of being impatient.

The mustachioed former News Corp. and Fox TV exec who will lead Hughes Electronics has waited more than three years for that chance — and was unemployed part of that time.

So he’s jazzed. “After all my years in the entertainment industry, I can’t think of a single transaction that gets my blood pumping like this does,” he said of News Corp.’s recent pact to acquire DirecTV parent Hughes.

“Our job is not done until there’s a satellite dish atop every home and business in America,” an elated Chase told the SkyForum satellite confab Tuesday in Gotham, in one of his first public appearances since the deal was announced.

He discussed a carefully laid out strategy to raise the bar and compete with cable, attracting new subscribers and reducing churn — the number of subs that check in and check out. He said the numbers are already rolling his way. DirecTV, and the smaller sat op EchoStar, grew customers and revenue in the first quarter.

Last year, he said, satellite added 2 million subs while cable lost 700,000. He sees more than 30 million satellite subs by the end of the decade.

DirecTV CEO Eddy Hartenstein, speaking at the same event, was even more upbeat — predicting as many as 35 million subs in three years. (DirecTV has just over 11 million.)

The execs touted satellite’s national footprint, a cheaper and more flexible infrastructure and reliable, high-quality programming that improves every day.

News Corp. also has got a sat biz template with BSkyB in the U.K. — a tremendous success but in a market with little competition. In the U.S., Carey acknowledged, cable is retrenching and fighting aggressively.

A key challenge is rolling out local broadcast channels on satellite in all of the 200-plus markets that DirecTV serves. Hartenstein said he hopes to serve about 100 markets by year’s end.

He seemed relieved to have deep-pocketed and media-savvy News Corp. behind him after years in the fold of General Motors. “We now have a shareholder, unlike our current major shareholder, that wants to aggressively grow the business. For every new market we have to add, that’s a capital-intensive investment. GM knows it, and that’s part of the reason they chose to divest,” he said.

Deal is expected to close late this year pending regulatory approval. “I think this one will stick,” Hartenstein said. “We’ll get it to the altar, and we’ll follow it through.”

Shot down

Last fall, the Federal Communications Commission and Dept. of Justice nixed a proposed merger between DirecTV parent Hughes and EchoStar on antitrust grounds.

Consumer groups and cablers worry about News Corp.’s combined programming and distribution might. But Hartenstein promised the company can’t and won’t play favorites.

Moving to quell other fears, Carey insisted that News Corp. has no plans to shut out electronics retailers but will make them a big part of DirecTV’s expansion.

He also said News Corp. would resolve its issues with Pegasus Communications, but not at any price. Pegasus is under contract to distribute DirecTV service to 8 million subs and News Corp. needs out of that contract.

“News Corp. will make quick decisions but not foolish ones,” Carey said.

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