The country's largest satellite television provider is eyeing the Netflix (Nasdaq: NFLX ) bandwagon.
DIRECTV (Nasdaq: DTV ) is surveying its subscribers, asking them if they would be open to a "streaming-only Netflix-like service for a flat fee per month." The story was broken yesterday, after a tipster approached digital media blog Zats Not Funny.
It's easy to see why DIRECTV wants in on the Web-served smorgasbord. Its nearest rival -- DISH Network (Nasdaq: DISH ) -- landed the winning bid for Blockbuster earlier this month. Even Netflix concedes this week that DISH will soon launch a Netlix-esque service under the Blockbuster brand.
DIRECTV's cable television adversaries are also all over the streaming bandwagon. Time Warner Cable (NYSE: TWC ) and Cablevision (NYSE: CVC ) have been offering their corded clients access to select streams on iPad tablets for weeks. Comcast (Nasdaq: CMCSK ) is championing the TV Everywhere movement through its ambitious Xfinity initiative.
The only puzzling aspect of DIRECTV's survey is that it's pitching this as a premium offering. Its digital smorgasbord would be an optional item that would be tacked on to DIRECTV's already chunky monthly bill.
Good luck with that, DIRECTV. All of the cable companies are offering digital video at no additional cost. It's a retention tool. If someone's already paying for televised content, why not give them portable access to the same shows and movies as well?
DIRECTV doesn't see it that way. By openly calling out Netflix by name, it's likely aiming beyond the channels and pay-per-view freebies that the cable providers are currently offering. DIRECTV will smoke out premium content, but it will have to be enough to set itself apart from everybody else -- Netflix included.
Satellite television isn't cheap for couch potatoes inked to the country's leader. DIRECTV's average revenue per user clocked in at a mind-boggling $96.64 a month during the holiday quarter. Its Sunday Ticket NFL exclusivity is a major contributor, but even the $89.71 a month average for all of last year seems like Tinseltown robbery. Does DIRECTV really think it can get people to pay even more?
DIRECTV's deal with the NFL has helped it avoid the subscriber defections suffered elsewhere. However, if it thinks it can milk more at a time when its cheaper rivals are offering more it's going to have a rude awakening.
Dish dissing will be the new cord cutting.
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