News Corp in 2005: Consolidating The DirecTV Acquisition (Page 2)

Abstract

The acquisition of DirecTV has given Rupert Murdoch's News Corp considerable bargaining power. With DirecTV, Murdoch has gained access to 12 million subscribers in the US. DirecTV is also expected to fortify News Corp''s own channels against competition from Comcast and Time Warner. Murdoch has dismantled everything at DirecTV that does not have anything to do with satellite broadcasting. He has also moved fast to acquire complete control of Fox Entertainment Group, which holds a controlling interest in DirecTV. DirecTV has launched new satellites. Modeling itself on the success of BSkyB (UK), DirecTV has announced it will introduce interactive television features to the American audience. Betting heavily on the popularity of football, DirecTV is finalising deals with the National Football League (NFL) for broadcasting rights. The case covers the history of DirecTV, its businesses and events starting from the acquisition of DirecTV in 2003 till early 2005.

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DirecTV's Business

DirecTV, the first entertainment service in the US to deliver all digital-quality, multi-channel TV programming to an 18-inch satellite dish, provided people across the US with a much-needed alternative to cable.

As of December 31, 2003, DirecTV had about 12.2 million subscribers, of whom about 10.7 million were DirecTV's subscribers. The remaining subscribers received DirecTV service from members and affiliates of the National Rural Telecommunications Cooperative. DirecTV also provided premium professional and collegiate sports programming such as the NFL SUNDAY TICKET package, which allowed subscribers to view as many as 14 NFL games played each Sunday during the regular season.

" PanAmSat, which owned and operated 25 satellites that were capable of transmitting signals to geographic areas covering over 98% of the world's population. PanAmSat provided satellite capacity for the transmission of cable and broadcast television programming from the content source to the cable operator or to the consumer's home. PanAmSat's satellites were able to reach nearly 100% of all cable subscribers in the US. In addition, PanAmSat provided satellite services to telecommunications carriers, government agencies, corporations and Internet service providers.

" Hughes Network Systems provided broadband satellite networks and services to both consumers and enterprises. Hughes Network Systems (HNS) constituted the DirecTV Network Systems segment. HNS was a leader in the global market for VSAT private business networks with more than 500,000 terminals shipped or ordered. SPACEWAY, a more advanced satellite broadband communications platform under development would provide customers with highspeed, two-way data communications on a more cost-efficient basis than systems that were currently available. The first SPACEWAY satellite service was expected to be introduced in 2005.....

        Case Code   BSTA003
   Case Length    14 Pages
              Period    2003 - 2005
 Organization     News Corp
        Pub Date     2005
Teaching Note    Not Available
     Countries    Global
      Industry    Media

Issues

History of DirecTV, its businesses and events starting from the acquisition of DirecTV

News Corp; DirecTV; Hughes; GM (General Motors); Comcast; Strategy; Acquisition; Rupert Murdoch; Monopoly; Media business