DirecTV's Run Looks Over

Analysts say DirecTV's competitive position won't change. Its CEO, Chase Carey, will stay in place, and its premium satellite TV service to 15.7 million subscribers will continue. Its capital structure, however, may shift.

Liberty's ownership of DirecTV will loosen its financial policies, analysts say, allowing the company to take on large amounts of debt and return cash to shareholders through a dividend or stock buyback. In that scenario, the company's focus could shift to growing its cash flows instead of its subscriber base.

Already, DirecTV has taken pains to tighten its credit policies to cut down on the number of high-risk customers who didn't pay their bills. It has focused on winning over deep-pocketed customers with its high-definition offerings and digital video recorders. In its third quarter, the company's average monthly revenue per subscriber rose to $72.74 from last year's $68.65.

During that quarter, profits almost quadrupled to $370.2 million, or 30 cents a share, beating Wall Street's expectations. Its revenue was up 13% to $3.67 billion, even while its subscriber growth slowed to 165,000 net new subscribers in the U.S. from 265,000 added in the year-ago period.

Its average monthly churn rate, which measures the number of subscribers who cancel their service, was higher-than-expected for the quarter at 1.8%, showing more evidence of the competitive threat from the cable industry. Under Liberty Media, DirecTV may ease its hunt for subscribers and focus on holding customer churn rates steady to grow its cash flows, but such a strategy might prove to be a boon for competitors.