Can DirecTV Continue to Surge Higher?
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DirecTV provides digital television entertainment in the United States and Latin America. The company engages in acquiring, promoting, selling, and distributing digital entertainment programming primarily through satellite to residential and commercial subscribers. A rising number of consumers are opting for satellite services due to the reduced costs and increased coverage offered. DirecTV is poised to capitalize on the increased entertainment demand from consumers in the United States and Latin America.
DirecTV CEO Mike White has said that the upcoming merger between Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC) needs to be closely observed by regulators, though DirecTV isn’t sure what stand it will take on the huge consolidation. “Certainly, if the deal is approved as proposed, it clearly represents an unprecedented media concentration in one company. I guess I think the challenge in terms of what posture we take in Washington, D.C., we haven’t decided yet. But I think one of the challenges is to try and ensure that it is appropriately scrutinized in some kind of unique ways than you might traditionally look at,” White said during a conference call after DirecTV posted its fourth-quarter results. “I think it certainly creates some significant changes in the competitive landscape that we need to think hard about.”
DirecTV’s fourth-quarter results showed that the company had 38 million satellite TV subscribers at the end of 2013. Full-year revenue rose 7 percent to $32 billion and profit grew 8 percent to $8.1 billion. Last week, Comcast, the largest cable provider in the country, announced its intention to buy Time Warner Cable. If that deal is allowed by regulators to pass, it will give Comcast 30 million subscribers, or 30 percent of the pay-TV market, and a presence in 19 out of 20 markets in the United States. The new Comcast will be far and away the dominant company in both cable and broadband Internet service in the U.S., which has led many to worry about the effect such a monopoly could have on consumers.