DirecTV U.S. Subscriber Base Shrinks in Second Quarter 2012

DirecTV suffered a U.S. subscriber decline for what seems to be the first time many of us can recall, raising questions about whether that result is entirely a deliberate DirecTV policy related to bad debt, or perhaps an indication that the satellite TV business has reached a peak, in terms of market share.


Net subscribers declined in the quarter "principally due to lower gross subscriber additions, partially offset by a reduction in the average monthly churn rate," DirecTV says.


But DirecTV also says the "gross additions declined mainly due to a greater focus on higher quality subscribers and stricter credit policies, as well as lower gross additions from the telco sales channel."


In other words, some of the slower net additions were the result of DirecTV refusing to sell to some potential customers, while sales activity by telco partners is waning. 


The lower churn rate was mainly driven by a greater percentage of subscribers on contracts, auto-bill pay and customers that buy advanced equipment, DirecTV reports. 


Average revenue per user increased 4.2 percent to $94.40, due mostly to price increases on programming packages, higher advanced service fees, pay-per-view revenues and penetration of premium channels, partially offset by increased promotional offers to new and existing customers, DirecTV said. 


DirecTV's 19.91 million U.S. subscribers represented an increase of two percent, year over year, though.