A Big Week of News for Satellite Providers

With the stock market still bouncing back from the financial crisis, many are looking at the telecommunications sector to see if there are any indications of a slow down. While the financial markets have been in tatters for the last two months, 3rd quarter reports and 4th quarter estimates appear to be strong for some of the leading satellite providers – namely, Direct TV.

While new home starts have declined and potential new customers may be sitting out the current economic crisis to purchase subscriptions, profits hold steady for many of the leading satellite providers. Strategic partnerships and alliances with larger telecommunications companies like AT&T and Verizon seem to be helping them counter cable. One key strategic alliance that was re-established was that between Direct TV and AT&T. This may be the reason why they posted a 14% increase in profit for the 3rd quarter. Telecommunications companies are relying heavily on these strategic alliances with satellite providers so they can offer their customers a complete package of phone service, wireless service, high speed Internet and satellite programming all on one bill. This puts the satellite companies in the driver’s seat and also helps them reach out to a potential customer base. Customers are looking for telecommunications and home entertainment solutions on one bill, and as long as a telecommunications company can offer satellite programming as part of that package, new subscriptions are sure to rise.

Direct TV may be in for some good news. Satellite television is poised to have a good fourth quarter for one reason: more customers. The financial outlook and strategic alliances that were solidified in the 3rd quarter are bound to show results on the bottom line as more subscribers sign up for satellite service. There is also the big day arriving in February when people who are still on analog antennas are going to be forced to make a decision. Broadcasting will make history that day by going all-digital and people with analog sets will have to either buy a converter box so they can receive the signal, or they have to subscribe to a pay television service such as satellite or cable and they will not have to worry about purchasing a converter box.

Satellite providers are bound to make a big marketing push in the fourth quarter providing customers with a good reason to make a switch to satellite televisions. In addition to the wide range of programming it offers, it will be beneficial to be hooked up to the dish before the digital switch occurs. People who were analog hold outs are prime targets for satellite companies, like Direct TV, to convince that now is the time to make the switch and to start enjoying the benefits of digital television.

Other news that may not come as a surprise to the satellite sector is a new survey of 200 consumers by Heavy Reading. This survey says that most consumers believe low price is what will entice them to purchase a pay television service rather than innovative technology. While this may come as no surprise, it does offer insight into what satellite customers and potential customers are looking for. This information comes at a time when providers are trying to differentiate themselves by expounding on their technical advances. This study may give them pause to reconsider marketing efforts, particularly in a sensitive economic time when people are in shop-around mode. The rest of the year and beginning of 2009 is rife with opportunity for the satellite television sector. Their challenge is to continue to lure new subscribers in, and they have a mixed environment to do that in. There is a shaky economy, but there is also the opportunity in February when the switch to digital comes to fruition. With some targeted marketing and competitive pricing, the satellite television market looks to finish the year strong.