DirecTV continued to add customers in the fourth quarter last year even as customer monthly bills inched upward.
But the satellite TV provider’s 119,000 net new subscribers in the fourth quarter was nearly one-third less than the 301,000 subscribers it added a year earlier.
The company said that declines in the last quarter of 2009 were due to competition, a weaker economy and more stringent credit and spending policies. In other words, investors should be happy that DirecTV was able to get more money out of existing customers — or $92.36 a month, up $1.90 or 2.1 percent from 2008′s fourth-quarter average monthly revenue of $90.46
What made bills go higher? Price increases, and more customers subscribing to HD channels, DVRs and NFL programming, says the company. That helped offset lower revenues on pay-per-view events and new customer offers.
Overall, DirecTV ended 2009 with 18,560,000 customers, up 5.3 percent from 2008. Its average monthly revenue per subscriber was up about 1.9 percent, or $1.58, to $85.48.
Like every other TV service provider, DirecTV continued to face higher prices from TV channels. Last year, these programming fees rose $766 million to $9.1 billion. That’s a 9.2 percent increase from the prior year! Programming fees are usually the biggest expense for every TV company. And failed negotiations sometimes lead to public disputes like the New Year’s Eve showdown between Time Warner Cable and Fox TV.
Regardless, those higher fees often end up raising customer bills. So far this year, DirecTV has announced 5 percent rate hikes for most customers. See earlier story “DirecTV prices going up in 2010 too.”
The financials: DirecTV lost $32 million on revenues of $5.98 billion. The loss was due to its November merger with Liberty Entertainment. Excluding the merger, the company said its net income would have been $454 million, which was up from the year earlier’s net income of $332 million on revenues of $5.31 billion.
Read the company’s earnings report HERE.