Please Correct me if I'm wrong

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Lj009

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I may be old fashioned but aren't we the the consumer and Dish ( and Direct ) are the provider????? Since when is the provider dictates all the "RULES" . After reading many many posts on this site it seems to me that the provider sets all the rules like what we can see how many DVRs we can have how many "boxes we can have and that it must be hooked up to a phone line. WHAT HAPPENED we pay THERE salaries Shouldn't we count. THINK ABOUT IT!!!!!!!!
 
riffjim4069

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In general, cable TV services and pricing have been so bad over the years people have been signing up with DBS providers (DirecTV and Dish Network)...even if it meant buying hardware . With double-digit growth and no other cable choices, the satellite providers have held an upper hand in this relationship because their service and pricing have been somewhat better than cable. However, these days are quickly changing with the telcos getting into the video marketplace; cable, satellite and telcos will soon be fighting for our viewing, surfing and dialing dollars. Competition will drive down cable TV prices and both service and technology will improve.
 
Scott Greczkowski

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Its simple, they are selling you the receiver for $99 or $299, however it costs them $600 or more to make it, thus you are getting a big price break so they can set the rules. :)
 
njjeepguy

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I would not exactly use the word selling. You are paying for the privledge to lease their equiptment.
 
Grandude

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Scott Greczkowski said:
Its simple, they are selling you the receiver for $99 or $299, however it costs them $600 or more to make it, thus you are getting a big price break so they can set the rules. :)
I'd be willing to wager that their cost/receiver, 622 in this case, is much less than that. I would guess that it is under $300 to them.:rolleyes:
 
navychop

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Not even remotely. They subsidize the receivers to get you to pay for programming. Same thing with razors and razor blades.

Somewhere here someone posted a pdf from D* that listed the costs of their STBs. Dish costs would be similar. Several hundred dollars a unit for DVRs. Think about it, even with volume buying- hard disks and newly developed cutting edge MPEG-4 chips, remotes etc that have no application save for a few hundred thousand receivers.
 
SimpleSimon

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Even if Scott has been givn that $600 number by his sources, I think it's wrong.

ALL things considered, $300 is a more realistic number of a DVR.
 
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Cincyray

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Have you ever gone to the store and for instance a case of coke is $2.99 limit 3 per customer. So it dosent matter if we are the customer and they the provider they can make any rule they want. You dont like it dont buy it.
 
navychop

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See page 30 of the pdf in post 1 of this thread. It shows the cost of a D* HD DVR to be about $550 as of the end of 2005. I'd expect E* costs to be similar. Maybe E* cost would be a bit more, since they have the Ethernet port and OTA tuner. I understand D* is moving to eliminate OTA tuners in future products.

The link also lists the costs for the other STBs.
 
ChefBoy

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Lj009 said:
I may be old fashioned but aren't we the the consumer and Dish ( and Direct ) are the provider????? Since when is the provider dictates all the "RULES". <snip> Shouldn't we count. THINK ABOUT IT!!!!!!!!

OK, you're wrong. This isn't a government, it's a business. It's called "capitalism". Businesses that provide goods and services can set rules as to what will be offered and how it may be purchased. Your power is in your ability to choose NOT to purchase those good and services, or to purchase them elsewhere.

CB
 
JoeSp

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I believe Scott is more on the money. You are talking about a Hard Drive that is probably about $90 gross, a MPEG4 chip that is about $175 a pop, the mother board -$15 the memory chips -- $30, lets not forget the power supply- $20. You also have the case $10, the outlets $20 except for the HDMI that one's gonna cost you with the copy protection $75. Lets see did I forget anything -- oh yeah the OTA chip -- $125. So lets see how I did, $550! Did I forget anything -- oh fooey -- I forgot the software. How much does it cost to develope the software -- $10 per unit. And least but not last -- the labor to put it together --- maybe $20 per unit? I am at $580 so $600 sounds about right. I am guessing at the MPEG4 chip and the OTA chip. And I did not even add the proccessor chip to this. If Dish is getting these done for $600 they are doing good.

Microsoft is losing about $300 an XBOX360 and if Sony tries to sell the Playstation 3 at XBOX360 prices they will lose about $500 per unit.

You may ask how these companies can sell at such a hugh lose it is always about the software -- or where E* and D* live -- the programming. That is where they make a killing!
 
mike123abc

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Dish does not lose anything, they sell them for cost. If you lease you pay 1/2 up front, you pay $6/month for it (assuming you have AEP). And if you leave you have to send the leased one back. If you do the $99 deal they get you for $11/month (lease+extra box) and still get your box back if you leave.

The only risk to dish is if they need to change out the boxes in less than 3 years. The leased 942s are going to cost Dish some money since they are going to be returned for upgrade before they have gotten the $5/month long enough to pay for them.
 
Scott Greczkowski

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Grandude said:
I'd be willing to wager that their cost/receiver, 622 in this case, is much less than that. I would guess that it is under $300 to them.:rolleyes:

Your not figuring in the R&D time, the guys who made these things didn't voulenteer to make em you know. :)
 
tawhite

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Scott Greczkowski said:
Your not figuring in the R&D time, the guys who made these things didn't voulenteer to make em you know. :)

One would think so they way they work most of the time. ;)
 
Voyager6

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I think that you guys are thinking retail prices not wholesale. With initial product runs in the 500,000 to 1,000,000 unit range (quite possibly much higher) for the 211 and 622, I would think that the unit costs will be much lower than you are estimating. Computer manufacturers can sell a complete system with monitor, optical drive, hard drive, keyboard, mouse and software for under $500. A satellite receiver is actually simpler than a computer to manufacture. Using the 942 as a template for the mobo and software, the 622 did not require that much R&D. I would guess that the 622 at $299 for a lease E* is about breaking even and will make their profit on the continuing lease revenues. For the 211, which will now be the E* entry level receiver, they are definitely losing money initially but will probably break even after the 18 month lease contract. Installation costs must be recouped from the programming revenue stream.
 
Mike500

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Cincyray said:
Have you ever gone to the store and for instance a case of coke is $2.99 limit 3 per customer. So it dosent matter if we are the customer and they the provider they can make any rule they want. You dont like it dont buy it.


Wrong! Unless the price is really cheap, and much less than the seller's cost, the limit is a marketing ploy on the customer's psychology, to make him or her think it's a better deal.

In that case, they'd limit the total number available.
 
jayn_j

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njjeepguy said:
I would not exactly use the word selling. You are paying for the privledge to lease their equiptment.

I look at this whole thread and realize that few people here really understand the concept of a lease.

When someone offers to lease a product, they look at 3 things. First is the current price. Second is the cost of money, ie the current interest rate. Third is the residual value of the product at the end of the lease. This one is a crap shoot, because they are betting on value some years out. Obviously in the case of the 942 and 921, the residual value should have been 0. I would bet that DISH tends to do just that with their receivers. I would bet that they amortize them over no more than 2 years given the rapid technology changes going on.

Anyway, from that point, it is a simple matter of applying a simple amortization schedule. Assume a Present value of $699, a future value of $0, a term of 24 months, and an interest rate of 1% per month (hey they can do credit card rates if they like). You come up with a figure around $35/month. This is where you would be if you financed it through your VISA card.

Now DISH asks for $200 up front. That has the effect of lowering the Present value to $499. Given the same $0 future value and interest rate, you come up with about $24/month. They charge a $6 HD lease fee and a $6 HD DVR fee. The rest gets amorized into the programming cost.

The point here is that we probably are getting a deal that is no better or worse than anybody else. The lease fee is nothing more than financing on the receiver. I can only assume that the new leasing policy by dish and direct is to get those old poor performing boxes out of circulation. As an owner of a 4900, I can definitely see some advantage there, although the cheapskate in me wants to keep using the obsolete equipment as long as possible. But hey, I'm still driving a 16 year old car.
 
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Chrisc490

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Voyager6 said:
... Computer manufacturers can sell a complete system with monitor, optical drive, hard drive, keyboard, mouse and software for under $500. A satellite receiver is actually simpler than a computer to manufacture. Using the 942 as a template for the mobo and software, the 622 did not require that much R&D. I would guess that the 622 at $299 for a lease E* is about breaking even and will make their profit on the continuing lease revenues. For the 211, which will now be the E* entry level receiver, they are definitely losing money initially but will probably break even after the 18 month lease contract. Installation costs must be recouped from the programming revenue stream.


Of course the computer you're getting for $500 is the equivalent of the 942 in this case. The most recently obsolete technology. Try getting high end systems for under 1500!
 
navychop

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Voyager6:

The link I posted references D* costs- i.e., wholesale. Based on these published HD DVR costs to D*, it is reasonable to assume costs are similar, or perhaps a tad higher, for E*. Simply put, today it appears that today it costs E* $550 to $600, perhaps a bit more, to buy a ViP622. And I'm not sure that includes the software costs.

There is more R&D than you would think. Scott has already posted that there is a lot more to this receiver than the 942. Adding code for MPEG-4 and Ethernet, additional outputs, stereo agile, etc.
 

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