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Guest Message by DevFuse

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I'm tired of DIRECTV's Creative Ways of Digging into my pocket


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163 replies to this topic

#41 OFFLINE   unixguru

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Posted 11 August 2013 - 12:51 PM

These numbers are straight from DirecTVs financial statement:  60% of gross income goes to COGS, what they pay for the programming plus I would guess a lot of the cost of running uplink centers and installation goes there. 25% goes to the cost of running the business. The is leaves 15% for profit and taxes take a third of that  so only 10% is actually profit.

 

I suspect the 25% cost of running the business includes all hardware/software development and operation, both uplinks and receivers.  As well as customer service, sales, marketing, general operations, etc, etc.  If it doesn't then they are incompetent.

 

The biggest bite is the programming.  The very thing that has been a rapidly increasing cost for some time.  A mostly uncontrollable cost in the current climate.  An unjustifiable cost IMO.  Something has to give - either DirecTV and/or customers need more leverage on this.

 

The government needs to step in and restore balance in the market.



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#42 OFFLINE   Laxguy

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Posted 11 August 2013 - 01:15 PM

No, please, no Gov't. intervention. Yes on righting inequities that they caused, but heavens! Washington running our TV services?? NO! We'd never have Breaking Bad if that were the case. And, and and....


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#43 OFFLINE   PCampbell

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Posted 11 August 2013 - 01:36 PM

When the cost gets to high more will drop the service and thats when changes will start to happen. TWC and ATT UVerce here are about the same in cost as Directv and have add on chages also so the only choice is to call and ask for a discounts or drop the service. TV service is not needed to live like food and housing.


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#44 OFFLINE   longrider

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Posted 11 August 2013 - 01:40 PM

Government intervention is the last thing I want.  While it could control costs it would definitely control content and that  would destroy it.


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#45 OFFLINE   longrider

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Posted 11 August 2013 - 02:10 PM

This discussion made me study DirecTVs financials a little closer and while their Income Statement is decent their Balance Sheet looks terrible.  Over the past 5 years they have wiped out almost 10B of equity, while this is partly due to depreciation (a 'paper' expense in that no money actually left the company) the long term debt has more than tripled in 5 years.  While it is great to see that they are willing to invest for the future this trend has to turn around.  They unfortunately are at a point that any attempts to increase revenue will be ineffective in that any increase in ARPU will be cancelled out by the net loss of customers.


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#46 OFFLINE   Laxguy

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Posted 11 August 2013 - 02:37 PM

Depreciation, etc., doesn't "wipe out" equity. Shareholder's Equity has increased over the last three years, as has Net Income.

 

Indeed they are more leveraged than before but that alone isn't cause for concern, but as you mentioned, ARPU and maintaining or increasing those units will be key. 


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#47 OFFLINE   longrider

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Posted 11 August 2013 - 02:50 PM

I may have used the wrong term as this is not my area of expertise but from their financial statement http://www.marketwat...s/balance-sheet shareholder equity has gone from <194M> in 2010 to <5.43B> in 2012 and on the asset side the depreciation is subtracting from the value of the assets


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#48 OFFLINE   Laxguy

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Posted 11 August 2013 - 03:16 PM

It looks to me as though DIRECTV has made major buybacks of their common stock. 

Depreciation occurs whether it's recognized on the Income Statement (and hence the Balance Sheet) or not. It's a book entry, usually a tax-deduction.


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#49 OFFLINE   tonyd79

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Posted 11 August 2013 - 05:14 PM

No, please, no Gov't. intervention. Yes on righting inequities that they caused, but heavens! Washington running our TV services?? NO! We'd never have Breaking Bad if that were the case. And, and and....


I agree that the government has other things to concern itself with but as far as the government killing quality TV, try to tell that to the BBC. I find myself watching more and more BBC originating programs every year and we get more of them (as well as a large number of successful shows going as far back as All in the Family were actually conceived under "government control" in Great Britain).

Of course, our government has a way of screwing things up uniquely.
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#50 OFFLINE   SledgeHammer

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Posted 11 August 2013 - 05:31 PM

 

Additional TV - Charge

Additional TV - Charge

Additional TV - Charge

Advanced Receiver-HD -Charge

Advanced Receiver-DVR - Charge

DIRECTV Protection Plan - Charge

DIRECTV Whole-Home DVR Service - Charge"

 

I'm confused here. The protection plan is a complete waste of $$$, you don't need that. Unless you constantly bug DTV with issues and you're a good customer, theyll generally fix stuff for free.

 

Whole Home DVR, yeah, thats only $3, but also a waste of $$$. Just record it on the TV you plan to watch it on. Or walk over to your main TV.

 

I'm more pissed off on the more ridiculous charges. Like the $2 I pay for "regional sports fee". I have HONESTLY (and I'm not exagerrating here) NEVER watched a sports game on TV. Not even once. Not even the olympics. Sports just bore me. Yet I pay $2 a month for them.

 

The $10 for HD is also ridiculous. Dish gives it out for free. So do most other providers. Yet, I have to call in every 6 months to get a credit. Yeah, I'm getting a credit, but I'd rather not have to call in and get it. I've been with DTV since 2002 and have always paid my bill, yet some newbie comes in and gets free HD for life? yeah, I'm gonna complain.

 

$10 / month for the HD DVR is also a bit crazy. I already paid for the box.

 

I'm betting it doesn't cost DTV $10/month/household to get the guide info.



#51 OFFLINE   damondlt

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Posted 11 August 2013 - 05:37 PM

I dropped the Protection plan, as I too think its a money grab.


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#52 OFFLINE   peds48

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Posted 11 August 2013 - 05:43 PM

AT&T charges $35.00 to "mirror" my data plan to my 2nd and 3rd iPhone, but yet no one "complains"
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#53 OFFLINE   tonyd79

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Posted 11 August 2013 - 05:55 PM

AT&T charges $35.00 to "mirror" my data plan to my 2nd and 3rd iPhone, but yet no one "complains"


It's all in the packaging. Call it a "family plan" and up the price.
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#54 OFFLINE   peds48

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Posted 11 August 2013 - 07:30 PM

It's all in the packaging. Call it a "family plan" and up the price.

SO is a good thing that DirecTV only charges $6.00 per receiver
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#55 OFFLINE   Spike

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Posted 12 August 2013 - 01:40 AM

AT&T charges $35.00 to "mirror" my data plan to my 2nd and 3rd iPhone, but yet no one "complains"

There are other companies out there currently that are addressing this issue to the point that people are switching and saving money. But that is the subject for a different type of web site.


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#56 OFFLINE   dpeters11

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Posted 12 August 2013 - 06:11 AM

There certainly are ways that DirecTV could really try for a money grab, like not having the DVR fee per account. I honestly don't know of any carrier that doesn't charge a monthly fee for DVR. Tivo of course has their lifetime DVR, but you pay for that, and if the DVR fails after the warranty is expired, you lose it.

 

Could DirecTV include HD? Sure, but SD subscribers would feel that they are paying for something they don't use. DirecTV used to require Superfan to get HD Sunday Ticket, they dropped that several years ago.

 

All carriers have fees, everyone just has to decide which option is best for them. Fortunately, even for those in rural areas, there is more than one option.



#57 OFFLINE   Diana C

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Posted 12 August 2013 - 07:15 AM

On the issue of "mirror fees" - pricing is not solely based on cost, but on value. If the programming DirecTV delivers to you has value (and I don't argue that the cost is high) then delivering it to multiple outlets instead of just one has incremental value. If they charged nothing, then they would be giving away value (a cardinal sin in the rules of capitaIism). DirecTV has valued this service at $6 per outlet. Others value their service at different, but roughly analogous, prices. The same applies for whole home DVR service and HD. The fact that all the providers, satellite and cable, have pretty much the same bottom line price once you net out all the services shows that the prices are fair. If they were not, some provider would come along and try to steal market share with a lower price. Dish Network tried that, and had to bring their prices into line with everyone else to make a profit.

As has been noted, the problem is not DirecTV or any other middleman provider, it is the cost of the content itself. There are many factors that drive this but chief among these is the cost of people. Sports content is so outrageously expensive because athletes are paid so outrageously. Entertainment costs are high because big name actors are paid obscene amounts of money. I'm not saying actors and athletes shouldn't take the money...they'd be fools to turn it down. But why are the teams and producers willing to pay so much? Because viewers and fans want the sports coverage, the movies and the TV shows.

So, we have no one to blame but ourselves. We continue to pay for access to an ever larger pool of entertainment and sports. As long as most people keep shelling out the money costs will not come down. The consumer ultimately controls pricing.
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#58 OFFLINE   MysteryMan

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Posted 12 August 2013 - 07:56 AM

On the issue of "mirror fees" - pricing is not solely based on cost, but on value. If the programming DirecTV delivers to you has value (and I don't argue that the cost is high) then delivering it to multiple outlets instead of just one has incremental value. If they charged nothing, then they would be giving away value (a cardinal sin in the rules of capitaIism). DirecTV has valued this service at $6 per outlet. Others value their service at different, but roughly analogous, prices. The same applies for whole home DVR service and HD. The fact that all the providers, satellite and cable, have pretty much the same bottom line price once you net out all the services shows that the prices are fair. If they were not, some provider would come along and try to steal market share with a lower price. Dish Network tried that, and had to bring their prices into line with everyone else to make a profit.

As has been noted, the problem is not DirecTV or any other middleman provider, it is the cost of the content itself. There are many factors that drive this but chief among these is the cost of people. Sports content is so outrageously expensive because athletes are paid so outrageously. Entertainment costs are high because big name actors are paid obscene amounts of money. I'm not saying actors and athletes shouldn't take the money...they'd be fools to turn it down. But why are the teams and producers willing to pay so much? Because viewers and fans want the sports coverage, the movies and the TV shows.

So, we have no one to blame but ourselves. We continue to pay for access to an ever larger pool of entertainment and sports. As long as most people keep shelling out the money costs will not come down. The consumer ultimately controls pricing.

Well said. :righton:


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#59 OFFLINE   Laxguy

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Posted 12 August 2013 - 08:27 AM

Agree. Pricing in these markets is based mostly on value, not cost. Grocery stores run off costs, by and large. 

 

I do wonder what will be the lever that brings down costs of sports- and team values, which I think are based mostly on TV and Gate revenues- If we consumers balk, then ad revenues fall, the value of TV contracts falls, distributors don't have to pay as much, and the poor little athletes have to settle for a few millions instead of dozens....


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#60 OFFLINE   unixguru

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Posted 12 August 2013 - 09:53 AM

Government intervention is the last thing I want.  While it could control costs it would definitely control content and that  would destroy it.

 

Intervention doesn't have to be huge.  Just preventing ESPN (for example) from forcing all subscribers to receive and pay for their channels would be a big improvement.

 

As has been noted, the problem is not DirecTV or any other middleman provider, it is the cost of the content itself. There are many factors that drive this but chief among these is the cost of people. Sports content is so outrageously expensive because athletes are paid so outrageously. Entertainment costs are high because big name actors are paid obscene amounts of money. I'm not saying actors and athletes shouldn't take the money...they'd be fools to turn it down. But why are the teams and producers willing to pay so much? Because viewers and fans want the sports coverage, the movies and the TV shows.

So, we have no one to blame but ourselves. We continue to pay for access to an ever larger pool of entertainment and sports. As long as most people keep shelling out the money costs will not come down. The consumer ultimately controls pricing.

 

The only control that the consumer has over sports cost is to not have a sat/cable service at all.

 

With the CBS and TWC spat we now see that the ESPN-style fleecing of the consumer is going to spread to everything.  "locals" will become a package.

 

The TV industry is accelerating towards it's own demise.  On the one hand we get more and more worthless content (like Honey Boo Boo, Lizard Lick Towing, etc) and good content is rapidly increasing in cost beyond it's value for most people.






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