America is the hub of entertainment in all genres and has been providing entertainment solutions to a global audience from ages. With the advent of technology the mode to showcase kept changing and the game changer was the launch of the TV. To be able to provide quality entertainment was the key mantra and transfixed the American society and with the advances made in digital technology, the initiation was the launch of companies providing digital television entertainment services.
Direct TV was launched in 1994 with the focus on satisfying the demands of the consumers based in USA and Latin America and with an excellent service record, Direct TV has been the leading player in the satellite television industry, which can be gauged from the fact that Direct TV has been the largest provider of DTH digital TV services and the second largest provider in the multi channel video programming distribution referred to as MVPD.
Another major aspect is service provided that caters to customer issues as in the service industry this helps a lot in carving an emotive connect with the client bases, and most importantly Direct TV led through the technological innovation that is the key forte of Pay TV sector and subsequently have the largest subscriber base i.e. more than 37 million customers in the markets it operates in the US and Latin America (Direct TV).
The content as mentioned above comprises of 190 fulltime HD channels in Dolby Digital, sound quality, sports entertainment that includes major attractions with NFL, NHL, NBA programming. Video Entertainment with an array of location catered, is also the key in view of providing customers with maximum avenues from hotel, restaurants and airports to name a few. The crown jewel is the original & premium content that connects with the audience at home with a unique bouquet of original shows, talk shows, concerts, on demand shows and streaming videos.
The technology used at Direct TV makes sure that the content is shared that is memorable in terms of ‘experience’. By launching ‘Genie’, that is the world’s most advanced HD DVR, besides, the leading the way by innovating the broadcast centers, satellites and radical applications for hardware and software (Direct TV).
The magnitude of Direct TV success was such that last year, AT&T acquired Direct TV, and the combined company business became the largest provider of the pay TV service (About Us).
In view of the retail business environment that is dynamic and ever changing in terms of the preferences of the consumers and with the options available with different kinds of media devices i.e. mobiles, tablets, laptops to name a few, it is imperative that the Pay TV business expands in terms of operational excellence.
As a consequence with the merger of Direct TV & AT&T the primary beneficiary will be the consumers who will be able to enjoy the resultant high speed internet service and the merger wont effect the consumers from either company, thus expanding a satisfied consumers base that firmly makes the company the market leading force in the sector.
The sector in general is affected by the ever changing preferences of the consumers, with TV as the premier mode of entertainment, being replaced by technological advances, most significantly the launch of the World Wide Web changed the dynamics forever, with new technology like mobile phone, tablets and the changing standards in terms of an on the go lifestyle, the pay TV model may perish in the future.
The major challenge for the sector is to keep the audience and most importantly the advertisers interested with the pay TV, cable and satellite networks. With social media gaining prominence the marketing and promotional trends for brands have changed, however, the changes in terms of behavioral and psychological motivation is an on-going affair and still TV is one of the strongest medium to connect with the consumers with programs such as major sports events like Olympics, Soccer World Cup, Oscar awards and also from a political standpoint the coverage of elections.
The traditional TV consumption is going down for the younger demographics and higher for the oldest group, as seen in the research study done by Nielsen shared in (Marketing Charts), the group’s demographics is referred to as the Teens (12-17), Older Millennials (25-34), Gen Xers (35-49), Adults (50-64) and the older group i.e. 65+.
Direct TV takes the competition very seriously and the primary focus is to cement and steal the TV subscriber market share in the sector and also keep in touch with the indirect competition.
The direct competitions is with Verizon, Comcast and TWC and after the merger with AT&T the competition in terms of numbers have grown significantly, with $234B, with the nearest competition being Verizon with the market cap being $203B as evidenced in the article on Mashable Aisa (Abbruzzese).
This is the strongest aspect of Direct TV in view of the wider network it has, besides the merger in 2014 of Comcast and TWC, AT&T and Direct TV leads the with value of $49B as opposed to $45B.
The other networks ranging from cable service and TV networks includes, HBO, CBS, Time Warner; besides, services such as Hulu, Amazon and Netflix are the services that will provide with most significant threat, as Video on Demand is expected to be the new way forward. You tube and other such online channels are also a competition in a way that the consumer’s busy life style makes it convenient for them to view it on their mobiles at any time once the content is posted online.
The strength as opposed to other networks in view of the merger with AT&T is wider network, speed of the internet, wider portfolio of content and technological advances in terms of storage data and viewing technology.
Although the merger, has given Direct TV a boost, it also comes with huge operating costs and as opposed to the competition may affect the profitability, that may weaken the operational aspect of the business.
In view of the merger the main opportunity is to provide premium content and also compete with Netflix and Hulu by providing video on demand (VOD) services in tandem with R&D arm of AT&T. Direct TV should diversify its services and connect with a younger consumer base by introducing mobile based services in terms of content and technology.
The main threat is that since the merger is new it will take time to launch initiatives to match with VOD service Netflix and co, and that means losing an early connect with the consumer base in the segment, advertising spend on other mediums, and the in ability to record commercials in the DVR service can be a hindrance. The lifestyle changes are also a threat.
Works Cited
About Us. AT&T Newsroom.2016. Web 27 March, 2016.
Abbruzzese, Jason. By the Numbers: AT&T's DirecTV Deal vs. the Competition. Mashable Asia 2014. Web 27 March, 2016.
Direct TV. Who We Are. Our Company 2016. Web 27 March, 2016.
Marketing Charts. Are Young People Watching Less TV? (Updated – Q3 2015 Data). Marketing to Urban Millennials 2015. Web 27 March, 2016.
