UBS predicts DirecTV subscriber growth will slow

With the U.S. pay TV sector reaching maturity, the days of significant subscriber growth may be over at DirecTV (Nasdaq: DTV), predicts UBS analyst John Hodulik.

DirecTV added a record 327,000 subscribers during the third quarter, thanks largely to promotions tied to its exclusive "NFL Sunday Ticket" programming package. But Hodulik, who downgraded his rating on DirecTV stock from a "buy" to "neutral" on Wednesday, says he expects growth at the top satellite TV provider to slow.

"The maturity of the U.S. pay TV market and increased competition from cable will require DirecTV to focus less on subscriber growth and more on retention and profitability," Hodulik wrote in a research note.

DirecTV CEO Mike White said in November that the company plans to slash spending this year, in response to consumers spending less on pay TV programming. Hodulik expects that DirecTV will pick up just 88,000 net subscriber additions this year. He had previously estimated that the company would add 344,000 subscribers in 2012.

For more:
- Hollywood Reporter has this story

Related articles:
DirecTV to slash spending in 2012
DirecTV ads warn viewers to ‘get rid of cable'
DirecTV posts best subscriber growth in five years for Q3 2011