I'm about to tell you how satellite TV provider DirecTV Group
DirecTV inflated fourth-quarter sales by 13% year over year, landing at $6 billion. Pro forma earnings jumped 49% to $0.48 per share, once you back out $486 million of merger-related charges. Operating margins expanded by 260 basis points, thanks to stricter customer credit policies and higher end-user prices, overcoming the negative effects of a weak economy and a harsher competitive landscape.
Competition from rival satellite operator Dish Network
All told, this was a healthy report, and DirecTV's stock is up more than 4% today. But like I already told you, you really shouldn't care much.
Why? Because DirecTV has had its day. Short-term traders might have some fun with broadcasting stocks for a while, but if you truly do invest for the long term, this is a dead industry walking. That ominous verdict covers both Dish and DirecTV, Comcast
If you look 10 years ahead, cable and satellite broadcasting will look like a dinosaur of a business model. Overrun by nimbler and ultimately more appealing models based on all-digital streams and/or downloads, the likes of DirecTV will seem as appealing to investors as terrestrial radio is today: outdated, uncompetitive, unprofitable. Maybe I'm wrong about the date, though -- this could happen much sooner than 2020.
The overlords of next-generation media will have figured out how to connect consumers with the content they really want to consume. Early contenders include TiVo
So: Nice quarter, DirecTV. Enjoy the good times while they last.