DirecTV may not have ended up the victor in the bidding competition for Hulu — in fact, nobody won that battle — but that doesn't meant the company's not keeping a close eye on streaming video opportunities for younger customers that would rather do without cable and satellite subscriptions.
Speaking during the company's Investor Day webcast, CEO Michael White stated that DirecTV had been "very aggressive" when considering the Hulu purchase largely because of its ability to cater to a more cost-conscious segment of the market. Characterizing over-the-top streaming video services as an "opportunity," he said that DirecTV plans to announce more details about its own plans in that arena over the next year — while also cautioning that the concept holds some challenges that may not make it the quick fix some customers might like.
DirecTV is skeptical of the 'Intel model'
Digital rights deals are much more difficult to procure and can be more expensive, White said, one of the reasons why he said moving to an "Intel model" — a reference to that company's recently cancelled online TV ambitions — a bad idea for DirecTV. There's also the issue of infrastructure. DirecTV can already deliver video to consumers across the US, whereas it would need to "ride on somebody else's highway" if it were to focus on internet-based television. "As far as our core business is concerned, we continue to be committed to growing our pure-play video business," he said.
Where the company will be focusing is very specific "niche" opportunities that could appeal to more price-conscious customers. "And particularly for millennial cord-cutters, which is where we thought the Hulu opportunity might be, I do think there are some opportunities there," he said, noting that obtaining digital rights is a part of every negotiation DirecTV is a part of.