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New Commitment Terms Start 10/17

Discussion in 'DIRECTV General Discussion' started by tim81, Oct 16, 2007.

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  1. Oct 17, 2007 #61 of 105
    surfmaui03

    surfmaui03 Legend

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    You`re right, I am guessing. But the fact that I am involved in a company that also produces electronic equipment, which uses some of the same types of components, gives me a general idea of manufacturing costs, in MY opinion. Do you think D* would lease out a box for $99-$199, when it costs them in the mid $400 range to manufacture? No way they will lose money on equipment that costs them that much, and shoot for making it up in programming. If that was the case, it would cost us more than that to lease these boxes upfront, and\or per month. No company will lose money, or break even on ANY product they put out, period! I have no need for new equipment now. Maybe in the future, but I never complained about the costs, or termination fees. While I don`t agree with an increase, it wouldn`t be a deal breaker for me either.
     
  2. Oct 17, 2007 #62 of 105
    surfmaui03

    surfmaui03 Legend

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    I`ve never looked, but maybe the parts are manufactured in China, and then assembled in Mexico? Many companies do this.
     
  3. Oct 17, 2007 #63 of 105
    hasan

    hasan Well-Known Member

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    Having been a D* customer since 1994 and paying 999 bucks for the first receiver, I'm probably outside the norm for most people on the forum.

    Unless I'm misreading something, as long as I intend to keep the service for at least two years after getting a new receiver et al, none of the concerns expressed so far apply to me, or others with similar inclinations.

    If you are getting in with the intention of preserving a way to get out early at a low cost, then you have reasons to be concerned. Otherwise, it's ho-hum as far as I can tell. Am I missing something?

    I have a similar arrangement with Verizon: every 2 years I get two new phones of my choosing free, as long as I extend my contract 2 years. Since I intend to keep Verizon for that period, all I see is two new phones.

    Neither of these arrangements would be appealing to a "testing the water" customer, but to someone who knows exactly what they want, they seem satisfactory to me.
     
  4. Oct 17, 2007 #64 of 105
    surfmaui03

    surfmaui03 Legend

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    :lol:
     
  5. Oct 17, 2007 #65 of 105
    Ken S

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    hasan,

    There's a difference though. When you get a mobile phone service contract the major items such as minutes, cost, data use, etc are stated and locked in.

    DirecTV, on the other hand, wants to hold people to a two-year commitment AND have the freedom to change/delete programming, raise rates, change contract terms, add fees, etc.
    Their latest agreement states that if you don't agree to a change you may cancel BUT you may be charged an early termination fee.

    Personally, I think they would have a hard time enforcing that section depending on the changes they make, but very few consumers are going to go to court over the matter.
     
  6. Oct 17, 2007 #66 of 105
    Upstream

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    Actually I wonder if there is a profit motive in getting customers to cancel.

    For example:

    If I upgrade to a DTV HD DVR, I have to pay DTV an upfront fee of $300.

    If I keep the box for 8 months and then decide to cancel, I have to also pay a $320 cancellation fee ($20 x 16 months).

    So they end up with $620 cash, plus I have to send the box back and they can reuse it with another customer.

    (Compare this to the retail price at Circuit City for an HD Tivo, $300, or an HD Series 3 Tivo, $600. But the purchaser gets to keep those boxes.

    So by inticing me to cancel, DTV ends up with the cash equal to the full retail value of the most sophisticated Tivo, plus they also have the box.


    I don't have a problem with DTV structuring their cancellation fees to discourage churn and recoup their costs. But I get concerned when I see that it is more profitable for them to get customers to cancel instead of providing quality customer service.
     
  7. Oct 17, 2007 #67 of 105
    Ken S

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    Their customer acquisition cost is somewhere around $675 (up about 5% from last year)...I don't think they're making money when they lose a customer.

    Their churn rate sits about 1.6%/month (25,000 customers is a lot to replace as the overall market grows more and more mature.)...that number has to come down to keep the financial markets happy.
     
  8. Oct 17, 2007 #68 of 105
    Elephanthead

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    These fees have nothing to do with the cost of equipment, they are all about preventing you from being able to switch providers. The worst part is DirecTV insists that their CRS people lie to you about the reason for the fees. Anyway, you pay your money and if you don't like, do agree to it, they clearly mention the fees when you activate. You recover it with cheaper monthly subscription costs, and if you paid for your equipment, you got suckered. Anyway thank goodness for OTA digital, yippe, more beer money for me!
     
  9. Oct 17, 2007 #69 of 105
    bonscott87

    bonscott87 Cutting Edge: ECHELON '07

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    Dish has 18 month commitment.
    Even cable has 12-24 month commitments (just try to drop that triple play pack early...ouch!)
     
  10. Oct 17, 2007 #70 of 105
    randyk47

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    Been with D* for 8+ years and will be with them until I'm boxed up and carried out of the house. :) Cancellation fees really don't bother me much.
     
  11. Oct 17, 2007 #71 of 105
    hasan

    hasan Well-Known Member

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    Yep, I think the advance lock-in with escalating prices is legally unenforcable, but the cost of personally asserting one's rights might exceed the unfair increase they are trying to get in the first place. We do have our surrogates, however (see last paragraph)

    Since you aren't paying in advance, they would have to come after you for the money and that gives you some advantage, but it could still be a real nasty experience.

    I differentiate that problem from getting a product from D* that plainly does not deliver what is promised and has no potential to do so. That's a no lose situation, and the lawyers at D* ain't stupid.

    Every contract requires at least "consideration" and "consent/meeting of the minds". If the company doesn't deliver the consideration promised, there is no contract. If the consumer doesn't consent, there is no contract, either.

    I suppose, under the scenario you describe D* could triple the cost of services within your two year commitment and they would argue that you couldn't get out of it. You and I agree, that is not likely to fly, and any State Attorney General worth his/her position would eat them for lunch (so it wouldn't be your court battle/court costs).

    All that aside, in the many years of dealing with D*, I have never felt taken advantage of in terms of fairness. Their communication quality leaves something to be desired at times, as do some of their marketing practices (not illegal, but strange, to say the least).

    All the hysteria about the HD Extra package will either be debunked or justified, depending on how things shake out with channel moves/distribution and costs come the end of the year. Some of the scenarios speculated upon have a "bad smell" to them.:)
     
  12. Oct 17, 2007 #72 of 105
    JLucPicard

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    The math seems pretty simple to me - maybe I'm missing something.

    $300 up front cost for the equipment/install. $20 a month for each month you get them to cancel early.

    VERSUS

    $300 up front cost for the equipment/install. $30-$120 a month for each month they subscribe to any one of the packages available to them.

    Seems to me the $30-$120 a month trumps the $20 a month early cancellation fee. I just can't see your scenario - sorry.
     
  13. Oct 17, 2007 #73 of 105
    boba

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    I would guess your manufacturer code is 100 (HR20-100) RCA is the manufacturer and they assemble in Mexico with parts from all over the world. I believe 700 is PACE which is a Chineese manufacturer.
     
  14. Oct 17, 2007 #74 of 105
    Ken S

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    hasan,

    I don't totally disagree with you by any means, but...

    1. We do pay in advance...we pay for DirecTV one month in advance. The upfront lease fee on the equipment is also an advance payment...is it not? I think I read where most of their customers pay with credit cards kept on file or EFT type transfers.

    2. I didn't make up the scenario...it's directly from the DirecTV user agreement. If they raise prices (or change any other term) you DO have the right to cancel...you just have to pay an early termination fee. By continuing to receive the service (not cancelling) you agree to the new terms. Continuing to provide the service is their consideration (at least in their minds). Clearly, this is an agreement of adhesion and may not stand up in court...but the new corporate law mentality is to threaten and then if pressed back off with non-disclosed settlements.

    Sure, you can file a complaint with your state AG, but most likely DirecTV will "settle" with anyone who starts to go that far and probably silence the complaint.

    I've been to the seminars where this type of activity is "discussed". Believe me...DirecTV isn't the worst offender by a long shot. You want to see real filth take a look at some alarm monitoring service companies.

    Anyway, as with the text of their maintenance agreement, they don't have to enforce their rather harsh terms...and they very well may not...at least for now. But, the management/ownership door at DirecTV has swung several times in recent years and a whole new administration could be in place and have an entirely different view.

    As for the the HD Extra package...it comes down to this. DirecTV is measured by Wall Street on how much money it makes and/or will make. As the market matures and subscriber growth rates slow they have to increase the monthly revenue per customer. That's what the HDDVR is all about and that's what the new satellites are all about. Guess what...it's going to keep going up...it has to. My prediction (based on my all too large gut feel) is we're looking at $100/month average bills in the next three years (it stands about $75 now up from about $65 a year ago).

    Those increases will be called something...that's up to the marketing department...but they're coming because unless you're showing the analysts a plan for solid growth year over year the stock will go down (it already has) and the real owners won't be happy.
     
  15. Oct 17, 2007 #75 of 105
    oakwcj

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    Assuming that it will be a long time before you're boxed up -- and I hope that it is -- how can you possibly see that far ahead with your crystal ball? I'm sure that there will be new internet-based video delivery services within the next decade. At the moment, I agree that D* is, to paraphrase Winston Churchill, the worst possible TV provider, with the exception of all the others.
     
  16. Oct 17, 2007 #76 of 105
    hasan

    hasan Well-Known Member

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    Ken,

    "Those increases will be called something...that's up to the marketing department...but they're coming because unless you're showing the analysts a plan for solid growth year over year the stock will go down (it already has) and the real owners won't be happy."

    That's a cold-hearted capitalist analysis, if I ever have seen one.:)

    (notice, I am not disputing its accuracy)
     
  17. Oct 17, 2007 #77 of 105
    ghostdog

    ghostdog AllStar

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    Call back and talk to retention. If you really want an HD DVR I bet you can get one for $99 even if you are a newcomer.
    With that deal however you will have a two year commitment. ;)
     
  18. Oct 17, 2007 #78 of 105
    Mikey Palmice

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    wait, I ordered yesterday and they told me 300 dollars for 24 months contract. 12 dollars or so per month prorated. Can they just change what they said to me and make it 20 dollars per month like above?
     
  19. Oct 17, 2007 #79 of 105
    Pink Fairy

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    I am sure that they will have to make exceptions when it comes to those who ordered before the new contracts started but activated eqiupment after.
     
  20. Oct 17, 2007 #80 of 105
    tealcomp

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