Cord-cutting technology was out in force at CES this week, and main rival Dish Network (NSDQ: DISH) just announced a “company relaunch” that includes, among other offerings, a souped-up DVR capable of recording up to six shows at once.
But that isn’t going to stop DirecTV (NYSE: DTV) from increasing the rates it charges subscribers in 2012.
DirecTV started notifying its nearly 20 million subscribers during this billing cycle that it will be charging more for its programming services starting Feb. 9. (I expect my notification to come with my January statement. Although in early December, I did talk a DirecTV rep into lowering my bill from $87 a month to $57 without a downgrade of service. I will admit I did drop Dish Network’s name a few times.)
Most packages will increase by $3 to $5 a month, with DVR rates jumping by $1 to $8. It’s not alone in the pay TV space — several cable operators are announcing the usual beginning-of-year price increase themselves — but DirecTV usually would prefer not to be part of that crowd.
So why is DirecTV raising its prices at a time of slow economic recovery, stagnant employment and proliferation by cord-cutting services like Netflix (NSDQ: NFLX) and Hulu, not to mention stepped-up competition from Dish Network, which has pledged not to increase its prices until 2013?
Said a DirecTV rep: “DirecTV will implement a nominal price adjustment that on average will increase the customer’s monthly bill approximately 4 percent beginning Feb. 9, 2012. The new pricing reflects the increasing cost of programming and the significant investments we’ve made to enhance our customers’ viewing experience.” The notice to consumers attributes the entire increase to higher programming costs.
Including the rate increase it owes News Corp. (NSDQ: NWS) for Fox Networks after yet another bitter carriage dispute, the satellite operator says program licensing costs across the board increased around 10 percent going into 2012. DirecTV also rolled out several service upgrades late last year, a new user interface among them.
In November, the satellite carrier reported a 4 percent increase in subscribers to 19.76 million and a 13.6 percent bump in revenue to $6.84 million.
Despite this strong performance, however, Bernstein Research issued a bearish report on DirecTV Wednesday.
Unlike its competing cable operators in the U.S., who can offset declining margins on video programming with gains in the higher-margin broadband business, DirecTV faces an “unappetizing choice,” Bernstein said: either accept the declining margins, or raise prices.
Since we rarely watch DirecTV, the price increase was motivation enough for me to call to cancel our service. The retention specialist was fairly aggressive. I said, “We want to cancel our service” at least 5 times, repeating as necessary, and the person kept lowering the price and increasing the perks, and seemed completely exasperated that we simply weren’t interested. He said, “I just don’t want you to be without TV” and even when I told him, and this is the truth, that my mother is currently dying of cancer, “So TV is not my top priority these days,” he still kept pitching. Finally, I asked if he wasn’t authorized to cancel my service, because if he wasn’t, I’d like to speak with his supervisor, and that if he kept not doing what I asked, I could promise him that I would never try DirecTV again. The entire “customer service” experience was dehumanizing for both parties — he, having to keep pitching when I wasn’t interested; me, having to repeat the same simple 6-word request. No wonder viewers are cutting the cord.
Once my contract is done in Sept, I’m done. $150 a month and no premiums, ridiculous. I was with them from 1996-2007, got FIOS (which blows them away). Had to go back when I moved to NC because FIOS wasn’t available. They suck now, quality of service-gone, equipment is slower than it was in 1998. I’ll just use an Antenna and torrents.
Their reps are well instructed to tell you that you cannot cancel without paying the ETF even though they jack up the prices. Keep pushing people, we cannot be treated like this. Contracts are there for a reason.
File cliams with whoever is necessary (BBB, FCC, claims court, or whoever listens)
Part of what you have to realize is that w DTV or any other company the
guy (or gal) answering your call to “just disconnect” services is just a
guy trying to support his family, like you are. His job, like it or
hate it, is to “save customers” and as well sell products. Had his
supervisor been OB’ing his call and NOT heard at least 2 or 3 attempts
to “save your services and you as a customer” he likely would have
gotten put on a warning of dismissal. Had his supervisor heard your
call, and just “coached him” on why he didn’t try very hard to save you,
and then let him off and then he got a another call doing the same
thing – he would’ve been fired. Also, many of us really don’t want to
disconnect our TV or internet or whatever we just want a lower billing,
so he is offering to help in those regards. Just sayin’… Don’t take it
out on the person answering your call. Be kind. We all hate price
raises, even those on the other end of the call as it makes it that much
harder to save folks from disconnecting much less to be able to sell it
to new customers. Just my two cents anyhow… I think the price increase
sucks too.
DirecTV does not care one bit about customer satisfaction. They keep changing the rules, changing packages, deleting channels, adding maintenance contracts. All that nickle and dime you every time you get a new bill.
You have a failure in service, they don’t walk you though checking it out and fixing it, they go into selling you maintenance contracts.
You want to go to HD. They want to charge you by the month PLUS charge you for a new receiver, PLUS charge you for installation. And guess what, all that would be free for a new customer. And they say they have so many HD channels. Well most are in the premium and junk channels where people are selling stuff, not programs. They say over 100 HD channels, well the average package has less then 35!!! False advertising maybe????? or just good old fashion FRAUD!!!