DirecTV has relied heavily on its exclusive sports packages, like the National Football League's Sunday Ticket, in marketing its service. But as sports packages become less of a differentiator, the satellite giant is taking a broader approach to make its service stand out to core customers.
That's where its new voice technology comes in. The feature allows users to search for programming and schedule recordings by speaking into their mobile devices. DirecTV began testing the technology this spring and will roll out marketing on the national launch date, Oct. 3.
By asking "what comedies are on?" users can receive a list of programs without flipping through networks, scrolling through a guide or knowing a channel number. The hope is that voice technology will also prompt viewers to discover channels outside their comfort zone, boosting the value of their TV package.
DirecTV CMO Paul Guyardo says voice technology has been a big hit with sports fans who use it to find games no matter where they air. "Voice totally supports our focus on the family guy, the premium nature of our service and desire to differentiate on innovation," Mr. Guyardo said.
In conjunction with the public launch, DirecTV is rolling out four TV spots, all of which feature men in uncomfortable and awkward situations. The spots were directed by Tom Kuntz, who also directed the company's "Cable Effects" campaign and Old Spice's "The Man Your Man Could Smell Like." Grey handles creative for DirecTV.
DirecTV declined to comment on the cost of the effort, which will run through the holiday season during college and NFL football, as well as on ESPN. A person familiar with the situation pegged the price tag at $30 million to $40 million.
DirecTV isn't the only one tapping into voice search: AT&T launched a voice-enabled app for U-verse last year, while Comcast is planning to roll out a similar feature later this year. Mr. Guyardo said DirecTV will stand out because of its ability to pinpoint the right customer.
Like its peers, DirecTV is grappling with higher content costs and consumer churn. In its most recent quarter, the company lost 84,000 subscribers, attributing the bigger-than-expected decline to its focus on attracting higher-quality customers who are less likely to cancel the service. It ended June with just over 20 million subscribers.
In an effort to attract the most profitable customers, DirecTV has taken a highly targeted approach to media buying, zeroing in on men. It's familiar territory for Mr. Guyardo, who was using big data well before it was fashionable as CMO at HSN and Kmart in the 1990s and early 2000s.
"Nobody was interested in transactional data back then. ... It was more about the big branding campaigns," Mr. Guyardo said, noting that when he joined DirecTV in 2005 his first order of business was to begin leveraging the data available to him.
DirecTV makes an $850 investment in every customer—and it typically takes about three years to see a return. "We have to be very, very targeted with incredible precision in terms of who we really want to focus our campaign on," said Mr. Guyardo, who last year added the title of chief revenue officer.
Mr. Guyardo said DirecTV's most profitable customers tend to be "family men" who are over 35 and living in a single-family home with kids. "You won't see us in "Dancing With the Stars'; you won't see us on "Revenge.' We got out of daytime and got heavy into sports—male-oriented cable like Syfy and FX and late-night," Mr. Guyardo said.
Sports have been DirecTV's bread and butter, especially NFL Sunday Ticket, which allows subscribers to watch football games outside of their local market. DirecTV's most recent campaign for Sunday Ticket, featuring quarterback champs Eli and Peyton Manning in a rap video, has been viewed 8.6 million times since it premiered in August, according to Visible Measures.
But while Sunday Ticket has been an important acquisition tool, with about 2 million people subscribing to the service, it's no longer the growth engine it once was. Last year, the company slashed its price for Sunday Ticket about 40% to less than $200 per subscriber. DirecTV has also discontinued several sports packages, such as Mega March Madness and Nascar Hot Pass.
The company's deal with the NFL expires at the end of the 2014 season, and media analysts are worried the company will not renew due to rising costs. It is estimated DirecTV pays the NFL $1 billion annually for exclusive rights.
But DirecTV, which has held the rights since Sunday Ticket's inception in 1994, seems confident of its chances for renewal, even as recent reports have focused on Google's potential to buy the rights. "We continue to have very constructive discussions with the NFL," said Mike White, CEO-president of DirecTV, on a recent earnings call. "I continue to be optimistic that we're great partners together and that DirecTV Sunday Ticket will stay with us for the long haul."