As much of it seems spot on, as a Directv retailer and someone who has been in this industry 22 years I do not see it getting to the point where Directv is going to stop installing Dishes.
The problem Directv is facing is 2 fold. The first issue has been the fact they have tried to keep the same $30/mo price point for new customers for the past 15 years.
Every year when there was a price increase, they simply gave new customers a larger discount to keep the initial price point around $30/mo.
In 2005 the discount might have been $5 or $10 per month. No big deal after the second year when a customer would pay regular rates. Come 2019, some of the customer discounts where as high as $55 per month in the first year.
It was a big sticker shock after 12 months having the rate in some cases double as the customer went into the second year of their contract.
Typically what would happen is that the customer would call to complain, and Directv would simply extend the discounts another year.
I have many customers who for years have always been on some type of discount and never paid full rack rates.
What happened this year was 2 significant things. Directv drew a hard line in the sand, and as these customers came off of their promotion, Directv refused to extend discounts like they typically did in the past. Also several contracts came up for renewal with local channels. For months there was markets missing a few popular local channels, which helped increase churn.
The second issue with the promotional pricing was the fact that the sales people where lying to customers about the second year price increase.
Once you disclosed to a customer their rate would double in the second year and the customer was locked Into a contract paying the higher price, we would loose the sale. This was true, especially with the higher value customers that Directv wanted to sign up.
The lower value customers, they would be happy for the fact they qualified to get service, disclosing the price would go up made no difference to them.
You can see Directv try to fix this issue by cutting the amount of the discount given to new customers, to help reduce the sticker shock when the rates went up in the second year.
Although I do not see Directv stopping dish installations all together, I do see them tightening up credit requirements so the customers they do sign up are with Directv long term.
Finally one of the other reasons why we see the decrease in new customers is the way the are marketing and treating their dealers.
Over the past 12 months they have eliminated 75% of their residential dealer base, mostly on the fact that the dealers wouldn’t sell other AT&T products such as internet and cell phones.
AT&T’s idea of finding better customers is finding customers who subscribe to multiple products and services. It’s very difficult to sell their internet service for example where the best they offer is 6 meg DSL, or if the customer can get anything at all. There are simply not enough areas they have wired with fiber yet to offer a decent internet service that can compete with cable.
As far as the cellular plans, AT&T is one of the highest priced carriers in the market. It’s very hard to get a customer to switch when a prepaid plan with boost mobile may be only $45 per month compared to over $100 with AT&T and their unlimited plans.
I think what we will see is AT&T try to launch their new streaming product, but it’s going to be a very difficult launch with all the other streaming options available, lack of AT&Tinternet coverage and no support from the dealers as their is no commission selling a streaming product.
tvanswerman.com
