What: DirecTV will launch an online video service called YaVeo , exclusively catering to Hispanic consumers, by the end of this year. Univision will be DirecTV’s new service major content supplier.
Why it matters: DirecTV’s “YaVeo”, joins a growing number of companies (Viacom. Sony, Verizon) signing deals with media companies to offer content for new online video services.
Following announcements from Sony, Verizon and Dish, DirecTV CEO Mike White said in a recent Financial Analysts Conference that the company is creating and close to launch an online video service by the end of this year.
However, DirecTV’s service will vary from the three others in that it will specifically target Hispanics, and will be called YaVeo , which translates to “Now I see.”
“There’s an ethnic opportunity,” noted White. Through a licensing deal, the service is expected to niche programming for a minimal price, with Univision as a major content supplier. The deal is expected to close by 2015.
Univision’s content would be a crucial offering for DirecTV’s online service, as it will help the satellite operator to offset smaller rival Dish Network Corp (DISH.O), which is creating a multichannel Internet TV service that would be a cheaper alternative to traditional cable and satellite services. Still, Univision didn’t specify whether this deal will include its’ linear channels or just access to its on-demand content. In addition to Univision, DirecTV may be in talks with other Spanish language media companies to supply content for the service.
The Hispanic service would be the first of a series of lower-priced niche online channels CEO Mike White has said the satellite provider would launch. However, It’s not clear yet how the service would function or look like. It is uncertain whether it would be ad-supported and/or subscription based, or even if it would offer live linear channels or on-demand access to telenovelas and other Spanish-language content.
Both the multichannel Dish offering and the more targeted DirecTV service are aimed at potential subscribers for whom traditional satellite service is too expensive.
Entiring the “niche” OTT space
Going after a Spanish-language audience makes a lot of sense for DirecTV. Not only is the size of this audience growing but also Latinos watch 90 minutes more online video per month than the average U.S. consumer, according to a recent Nielsen report. Focusing on Spanish-language content will also help DirecTV avoid directly competing with either Netflix or traditional TV services, both of which can be very expensive. That’s why other big operators, including Comcast and AT&T, are increasingly looking to niche programming for their online efforts as well.
White also discussed the AT+T acquisition made earlier this year. DirecTV, which has accepted a US $48.5 billion takeover offer from AT&T Inc (T.N), secured Internet rights to Univision content as part of a previously disclosed agreement signed in March 2013. DirecTV’s Latino video service could be a good complement to AT&T’s own niche video plans, should the acquisition be approved by regulators.
DirecTV’s “YaVeo”, joins a growing number of companies signing deals with media companies to offer content for new online services. Viacom and Sony announced on Sept. 10 an agreement for Viacom’s 22 cable channels, including MTV and Nickelodeon, to be offered online through Sony Internet-connected devices. Verizon Communications Inc (VZ.N) CEO Lowell McAdam said on Thursday that the telecoms provider plans to launch an Internet-based television service in the first half of 2015.Dish plans to offer a service by the end of the year, as the company has signed deals with Disney and A&E Networks to provide ESPN, the Disney Channel and Lifetime, among others.