DirecTV Chief Says Hispanic Online TV Service To Launch By Year End

The service, which is expected to be called YaVeo, will be DirecTV’s answer to the general audience TV services that Sony, Verizon, and Dish Network plan to offer via the Internet.  “There’s an ethnic opportunity and we’re looking to launch an Hispanic product later this year,” DirecTV CEO Michael White said today at the Goldman Sachs Communacopia conference. While he didn’t offer details about the programming, likely to be offered on-demand like Netflix with contributions from Univision and others, he says that it could be a model for additional online services. “You can think of it like specialty magazines.” He’s also exploring opportunities to offer NFL Sunday Ticket to college campuses and apartments — places that typically can’t accommodate satellite dishes. “Digital rights is an important part of our discussions with the NFL” as DirecTV negotiates a renewal of its Sunday Ticket deal.  White says he’s “highly confident” they’ll have an agreement by year end.

The CEO seemed skeptical about the prospects for the other so-called over-the-top online video services. Each plans to offer a slimmed down collection of channels for a lower price than conventional pay TV — targeting young viewers who often can’t afford the full bundle, or consider it a poor value. The problem is that programmers often make demands that could undermine the offerings. For example, Dish’s deal with Disney will require the satellite company to include several of the entertainment giant’s channels. “I’m not sure that mixing ESPN and ABC Family is a great idea for consumers,” White says. “It just so happens that’s the deal they got from the Disney Company.” In addition, he wonders whether the lower-priced online video services could “become a replacement [to full pay TV] for the low end customer.”

Content providers’ bundling requirements and price increases mean that DirecTV’s programming costs likely will grow by a double digit percentage next year, requiring a larger than average price increase. The idea that “the industry can defy gravity” is “unsustainable,” White says. “I have no idea when it stops.” DirecTV would like to be able to offer smaller bundles. Subscribers may force the industry to change if they cut the cord with traditional pay TV. “If you talk to consumers, they prefer something different.”

White says that DirecTV is only moderately interested in producing its own programming. “I’m not trying to be HBO….We’re looking for niche content. I don’t see it as being a major driver for us.” But he says things could change if regulators approve AT&T’s acquisition of DirecTV. The telco might have more appetite for original fare because “you’ve got a wireless network and you’re collecting money for data usage.”

In a separate appearance at the Goldman Sachs event, AT&T’s Ralph de la Vega said that his company sees an opportunity with DirecTV to develop programming that could be beamed to cars — especially for screens in the back seat to “help to keep the kids quiet.” General Motors, for one, asked for that “and the answer is absolutely yes….That’s going to be awesome.”

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