Posted 12 July 2012 - 12:26 PM
So the poll at this point is running 3 to 1 not missing viacom.
I'm wondering how many of those that would miss it would actually change service providers to get it? For sake of discussion, let's say half.
Purely hypothetical discussion with hypothetical numbers now...
Let's assume this microscopic sampling is representative of DirecTV customers. I'm not saying that it is, I'm just assuming that for sake of discussion.
If 1/8th of DirecTV customers would change service providers over this, and if DirecTV has 20,000,000 customers, that comes out to 2,500,000 customers. If these 2.5 million customers have an average monthly bill of $60, that comes out to roughly $150M per month, which is $1.8B a year, which is roughly $12.6B for 7 years.
Realistically, 1/8th of the customer base won't leave over this. Of whatever relatively small percentage would, offering incentives will keep most of those.
So I'm going to guess that for DirecTV it is probably a toss up of paying Viacom an extra $1B versus losing that amount of revenue from lost customers. They will end up being out the $1B either way. But, if they let Viacom do this, then they will have to pony up to all the other content providers as contract renewals come around, and they simply are not going to let that happen. So from my perspective, DirecTV will take the customer loss over the increased cost any day of the week.