DIRECTV, WeatherNation Ink Deal - Analyst Blog
April 08 2014 - 3:20PM
Zacks
DIRECTV (DTV), one
of the largest U.S. satellite TV operators, signed a multi-year
deal with WeatherNation to broadcast weather forecasts and related
events. The agreement came in after DIRECTV had stopped
broadcasting The Weather Channel in Jan 2014 due to programming fee
settlement conflicts. Following this development, DIRECTV shares
declined 0.8%.
However, DIRECTV has recently
initiated talks with The Weather Channel to resolve the programming
fee dispute. The Weather Channel is jointly controlled by NBC
universal, which is part of Comcast Corp. (CMCSA),
and two private equity firms, namely, Blackstone Group
LP (BX) and Bain Capital Partners LLC.In 2011,
DISH Network Corp. (DISH) also stopped
transmitting the channel due to a programming fee disagreement.
According to industry researcher
SNL Kagan, in 2012 and 2013, The Weather Channel received an
average fee of 13 cents a month per subscriber. The content
provider now seeks a fee hike of a penny, a month per subscriber.
According to rating firm Nielsen, The Weather Channel has lost more
than 19% of its audience since 2011.
One of the reasons behind The
Weather Channel’s declining viewership is the growing popularity of
its own smartphone and tablet applications with a substantial rise
in demand for the devices.
Notably, DIRECTV’s recent accord
with the WeatherNation will provide weather-related information and
radar imagery to the former’s 20 million subscribers.
DIRECTV currently has a Zacks Rank
#2 (Buy). Elimination of low-quality customers, launch of TV
Everywhere and online video streaming services are acting as
catalysts for the company. This is evident from the 19.5% positive
earnings surprise posted by the company in the last reported
quarter.
BLACKSTONE GRP (BX): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis Report
DIRECTV (DTV): Free Stock Analysis Report
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