Shares of satellite TV operator DIRECTV
The company signed up 289,000 net new American subscribers during the quarter and another 378,000 in Latin America. DIRECTV's single-minded focus on high-quality customers who want top-shelf programming packages and are less likely to cancel their service is paying off in spades as the company continues to grow while cable operators from Comcast
That's why monthly customer churn is a low 1.44% this quarter, compared to sitting above 1.5% for the past two fiscal years. That's despite DIRECTV raising prices and moving customers into more lucrative channel packages. Very impressive.
All told, fourth-quarter revenue grew by 11% to $6.6 billion and the bottom line jumped from a small loss last year to a $0.74 GAAP profit per share this time.
DIRECTV's focus on high-paying customers is making it feel like a premium provider, almost a status symbol. That's an important ingredient in the Apple recipe for success, and DIRECTV is smart to copy it. That's how you get committed customers, bordering on obsessed. The theme song for this demographic focus would be either "Losing My Religion" or "Every Breath You Take" -- pick your favorite stalker anthem.
Some consumers (myself included) may be cutting the cord on TV services and making the jump into a fully digitized infotainment era powered by Hulu and Netflix