The nation’s major satellite companies reported strong third-quarter growth last week, while rivals in the cable industry struggled to combat competition, as telecommunications companies enter various markets offering video service.
Douglas County-based Liberty Media Corp. is poised to reap the rewards. The company is set to take a 38.5 percent controlling stake in DirecTV Group Inc., the nation’s largest satellite provider, by the end of the year.
“The video side seems to be favoring satellite at the moment,” said Liberty chairman and cable pioneer John Malone during an earnings call Friday. “I think that’s primarily driven by more choice in high definition, which is clearly an edge at the moment in virtually all markets.”
Although income at El Segundo, Calif.-based DirecTV fell by 14 percent last week because of system enhancements, shares rose because the company beat expectations and gained new, higher-paying customers drawn to the provider’s high-definition TV offerings.
Douglas County-based EchoStar Communications Corp. reported earnings Friday of $199.7 million, or 44 cents a share, for the third quarter of 2007, up from $139.6 million, or 31 cents a share, for the same quarter a year ago. The company plans to hold a conference call with analysts today.
Comcast, the nation’s largest cable-TV provider, said last month that its third- quarter profit fell 54 percent and new customer additions slowed amid competition from phone and satellite-TV companies. But the company is still taking landline phone customers away from telecommunications companies. The telcos, in turn, are offering pay-TV services.
Liberty CEO Greg Maffei said that when the company was looking at DirecTV, “the market probably had overreacted to the power of the bundle,” in which consumers would prefer one company for their TV, phone, Internet and cellular needs.
He said that although satellite companies don’t have their own Internet, phone or cellphone offering, DirecTV has been able to create effective partnerships with telcos like Qwest, which sells DirecTV in a package deal with those other services.
Kimberly S. Johnson: 303-954-1088 or kjohnson@denverpost.com
