DirecTV Latin America has become a pay-TV giant in the region with more than 8.2 million subscribers. The operator now is embarking on a new strategy targeting emerging middle classes in the region. CEO Bruce Churchill discusses the 2010 performance, the next phase of growth and why Colombia could be an exciting market for pay-TV.
VIA SATELLITE: How have you built your subscriber base?
Churchill: We have three platforms, one we call Pan-Americana, which is Spanish-speaking South America. We pretty much operate throughout the Spanish-speaking part of Latin America, except for Bolivia. The big territories are Venezuela, Argentina and Colombia. That is a wholly owned subsidiary of DirecTV. There, we have 3.2 million subscribers. In Brazil, we own 74 percent of the operating company, and there, we have 2.3 million subscribers. In Mexico, where we are the minority shareholder, we have a percent share, we have 2.8 million subscribers.
VIA SATELLITE: How has the economy affected operations?
Churchill: The Latin American economies, with the possible exception of Mexico, are not so really tied to the United States but are more tied to countries in the emerging world, specifically China. So even though there was worldwide concern at the end of 2008 in Latin America, Latin America bounced back much more quickly. The reality is they were not as affected. Those economies do not have huge consumer credit issues. You didn’t have a credit bubble or anything like that. The fundamentals, in fact, were always quite strong.
In hindsight, there really wasn’t even a reason for a stalling in Latin America, but I think it was more psychological than real. Even 2009 was pretty strong for us. 2010 was particularly strong for us, and that could be explained due to the World Cup. As you know, in Latin America, there are three main sports, football, football and football. The World Cup generated a lot of excitement, encouraged people to buy TVs for the first time or upgrade their televisions to HD. That created a lot of excitement. We rode the wave of that excitement.
VIA SATELLITE: How important are the addition of HD channels in your business plan?
Churchill: I don’t necessarily think we will see a huge ramp-up in the number of HD channels we offer customers. In Brazil, for example, we offer 35 HD channels in our top package. If you look at our competition, they may have 23 HD channels. This is a cable operator, so we are the clear leader in Brazil offering HD services. In Mexico, we have 25 HD channels, which is ahead of the cable competition. Pan-Americana varies country by country, but we have roughly around 15 HD channels and we are on a par with everyone else. There is still a lot of growth there to be had, but there is still huge potential for HD growth.
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