Absorbing DirecTV Japan and listing on Mothers (2000)

The price of a monopoly

What distinguishes this decision is that taking on a competitor and stepping into the capital market happened in the same year. The DirecTV consolidation was less an absorption by the winner than the construction of a landing place for a foreign investor on its way out; on terms, it was the departing side that did better. Even so, once the platforms became one, the bidding war over retail incentives would stop and the conditions for repairing per-subscriber economics were in place. Rushing to list before the break-even point can be read the same way — a decision to go and get the money the repair would need without waiting for profitability.

A monopoly, however, came with a price. Mitsubishi Corporation and Nippon Television, pushed out of the picture, moved to build a rival axis in the next CS generation, and the contest for industry leadership simply continued elsewhere. Nor did the cost of gathering subscribers fall the moment the competition disappeared: clearing the accumulated deficit had to wait until June 2003 and a capital reduction without consideration. The reading that reducing competition would restore the economics turned out to be half right. The other half — where to find a way of earning other than adding subscribers — was left unanswered until the integration with the satellite company seven years later.