In a mature market for video subscribers, DirecTV will look to HD DVRs, massive VOD offerings and "NFL Sunday Ticket" to pry customers away from competitors. But executives are optimistic that a foray into local advertising will help it boost revenues, perhaps by grabbing share from cable.
Next year, the satellite operator will begin running local ads in 25 markets during breaks on cable networks. Ads will be delivered to DVRs and then inserted when necessary.
DirecTV's broader local initiative began last year when it started inserting targeted ads within nine regional sports networks.
Ironically, DirecTV has a deal with NCC Media, which sells spot inventory for cable providers, to serve as its sales agent. In certain markets, cable and satellite inventory will be combined as part of the traditional cable interconnects.
DirecTV CEO Michael White said technological hurdles in delivering local ads have hampered DirecTV's sales business. Cable operators with their advanced operations generate significantly more dollars per subscriber.
"Historically, cable was able to do local and with the satellite we didn't. Now, we have some new technologies next year ... and I think that's going to open up that opportunity for us to be able to close that gap," he said at an investor event last week.
On the national level, DirecTV offers multiple opportunities, including with interactive technologies. CFO Patrick Doyle said Sept. 15 that DirecTV ad dollars are about $400 million a year. By comparison, Comcast sold $1.4 billion worth in 2009.
"I don't know that we can kind of get right up to parity with [cable operators] because of kind of the legacy infrastructure that they have," Doyle told investors. "Our goal is to bridge a significant portion of that gap over the next two to three years."