DirecTV CFO Patrick Doyle seems to like the idea of merging his company with its closest rival, Dish Network. “Ten years ago we had a deal on the table,” he says. “The strength that you’d have in negotiations would be tremendous.” But he says a combination probably wouldn’t fly in Washington following the Justice Department’s recent decision to fight AT&T’s merger deal with T-Mobile. That “adds more uncertainty to where we are in the merger and antitrust environment.” Meanwhile, he doesn’t seem ready to say that DirecTV needs a deal despite the company’s lackluster domestic subscriber growth in June — to 19.4M, up 4% vs. the same period last year. Doyle attributes the weakness to defections by people who decided they can no longer afford pay TV. “We hope they’re not gone forever,” he says. Yet people who kept their satellite service are spending less. “We’re not seeing the type of demand that we’d like to see” for pay-per-view movies as well as other events, including fights, he says. As economic pressures grow, controlling programming costs has become “the No 1 issue for the industry. … We’re negotiating harder on marginal (channels).” DirecTV is especially wary about new and planned niche sports services such as the Longhorn Channel (University of Texas sports), the Pac-12 Network, and a channel for the Los Angeles Lakers. “I just don’t think the consumer’s interested in paying more,” Doyle says. “As an industry we have to be more disciplined in how we deal with content owners.” In addition to wrangling over price, DirecTV wants programmers to relax about TV Everywhere initiatives that would enable subscribers to watch shows on portable devices such as tablets and smart phones. “The biggest issue we see there is the rights issue,” he says. “It will get resolved, but it will take time.” As for 3D TV, the DirecTV exec says that “it hasn’t really caught fire for us.” But since the channels offering 3D fare don’t charge much, “if it does grow and pick up momentum, we’re in the right place.”
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