While cable and satellite providers carry hundreds of channels intended for human viewers, satellite TV provider DirecTV (NASDAQ:DTV) is set to change that tradition by showing world’s first television channel targeted at dogs. The company plans to launch DogTV, a network focused on programming that can soothe or entertain canines while their owners are out of the house. It appears that despite the fact that DirecTV will charge $5.99 per month for DogTV, there could be a big market for the network in the U.S.
What Is DogTV?
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DogTV is a network aimed at soothing and entertaining dogs. Israeli media company Jasmine TV owns the network and currently Cox Communications distributes its programming via its video-on-demand service in California. Israeli cable operator ‘Yes’ carries DogTV, and it also has a channel on Roku’s streaming video platform as well as YouTube. 
The network features 24/7 programming, which is created to meet specific attributes of a dog’s sense of vision and hearing and supports their natural behavior patterns. The network’s website claims that the channel helps prevent mental fatigue, depression and boredom. While some of the programming is intended to keep dogs from getting anxious or restless, some of it is meant to relax or stimulate them.
How Big Is The Market?
There are 78.2 million owned dogs in the U.S. and 46% of the U.S. households own atleast one dog.  DirecTV currently has close to 20 million “human” subscribers . In a test of DogTV at the Escondido Humane Society in California, it was found that exposure to the channel at least temporarily helped reduce barking and antsy behavior in the pets.  The result sounds encouraging for pet owners who care about their pets when they are away from home.
If we assume 46% of DirecTV’s subscribers own at least one dog and 25% of those households subscribe to DogTV, it can increase DirecTV’s revenues marginally by $14 million. If all the 46% subscribers opt for this network then the revenues would increase by $55 million. While we believe that many of the current subscribers may be willing to pay additional amount for the new network, certain households (with pets) who are not subscribed to DirecTV could consider shifting to the satellite provider with their pets in mind. This will have a more meaningful impact on DirecTV’s revenues and profits.
Our price estimate for DirecTV stands at $59, close to the current market price.Notes:
- What is DOGTV? DogTV’s Official Website [↩]
- U.S. pet-ownership and shelter statistics at a glance, Human Society, Jun 13, 2013 [↩]
- DirecTV’s SEC Filings [↩]
- DogTV: Will dogs want to watch TV shows made just for them?, Southern California Public Radio, Apr 27, 2012 [↩]