Satcaster merger
PerfecTV holds talks with DirecTV Japan
If the merger goes through, Sky PerfecTV will be the sole direct-to- home satcaster in Japan and will have enough subscribers -- more than 2 million -- to reach its estimated break even point.
"Sky PerfecTV has been holding talks with DirecTV about a possible merger, but, so far, nothing has been decided," Sky PerfecTV spokesman Yoshihide Toh told Variety.
DirecTV would not comment on the merger talks.
According to a story in the Monday edition of the financial daily Nihon Keizai Shimbun, the two companies have reached a basic merger agreement in which DirecTV's parent company Hughes Electronics Corp. will offer funding to Sky PerfecTV. Direct TV will then disband after transferring its subscribers to Sky PerfecTV.
Sky PerfecTV will issue about 9 billion yen ($81.8 million) in new shares by the end of March with DirecTV and its shareholders purchasing about 10% of the shares, the paper said.
Position solidified
In recent months, Sky PerfecTV -- which has Rupert Murdoch's News Corp., Sony Corp., Fuji Television Network Inc., Softbank Corp. and Itochu Corp. as its main investors -- has solidified its dominant position in the Japanese market by taking in about five times the amount of subscribers per month as rival DirecTV Japan.
At the end of January, number one platform Sky PerfecTV had about 1.7 million subscribers. DirecTV Japan, which has enrolled about 10,000 subscribers a month over the past year, had a total of 401,102 at the end of the month.
Gap grows
DirecTV Japan had tried management shakeups, capital injections, special promotions and other tactics to try to cut into Sky PerfecTV's lead in the market, but it only saw its subscription gap grow larger with its rival.
In December of this year, all of Japanese commercial networks will start new channels on a Japanese government satellite that will begin service in December. Sky PerfecTV is trying to solidify its position in the Japanese market prior to the launch of the new satellite service and increased competition.
Sky PerfecTV will double its capital in March from the current 40 billion yen ($363.6 million) to 80 billion yen.
