DirecTV Explores Online Video Service

DirecTV is exploring the idea of an online video service that would appeal to "price-sensitive" young people or other customers who have dropped their pay-TV service, the satellite TV firm said.

DirecTV executives told an investor meeting that the company saw online video as one of several growth areas for the next few years, also including home security and new advertising products. DirecTV Chief Executive Mike White said he wasn't thinking of competing with Netflix or replicating the pay TV bundle of channels online, but of developing "a niche" online video service with programming that appeals to specific groups of customers, such as Hispanic audiences and children. The satellite TV firm is looking for new business areas as growth in pay television slows sharply. Not only has the number of people with pay television stagnated in the past couple of years, but the growth of online video options has made it easier for people to drop pay TV service entirely. And while cable operators and phone companies sell broadband, insulating them from any shift toward online-based services, satellite TV firms are at a technological disadvantage in competing in broadband.