AT&T Wants low ARPU customers gone

[ncted]

I saw an article that said all the cable providers are doing the same thing. They no longer offer a deal if someone wants to cancel TV, they just let them do it. Having a customer that's internet only is higher margin for them because they don't pay all the programming costs.

So the people who change providers every year or two chasing specials or asking for discounts regularly will probably not be able to continue that with any provider going forward. Some of them will cut the cord, the rest will have to accept paying more.

So, after years of not wanting to be a "dumb pipe," they have realized it is actually better for their business to do just that, which is what everyone who understood where the market was going told them would happen at the time.

 

[NashGuy]

So, after years of not wanting to be a "dumb pipe," they have realized it is actually better for their business to do just that, which is what everyone who understood where the market was going told them would happen at the time.

Ha! Yep. Except that, in the case of the two big guys, Comcast and AT&T, they're also major content owners too. So they'll never become dumb pipes. They may not care whether or not you use their pipe to access video originating from other sources but they'll definitely still want you to get their own.

 

[Jimbo]

I think what this article states is consistent with what AT&T leadership has been saying about "cleaning up" their TV subscriber base and getting rid of those customers who only stick around if they're continually given discounts.

I think the new game plan going forward will be to offer slimmed-down slightly less expensive packages that are sold for an everyday regular price starting the first month, as opposed to having big discounts the first year, followed by sticker-shock price jumps up to the regular price in year two. Set the prices so that the packages earn a small but worthwhile profit margin for the provider. (Cable TV packages earn a lot of profit for the cable networks but not very much for the cable operators.) If customers are happy with the service for the price, great. If they decide the level of entertainment offered isn't worth the price, that's fine, they can drop it. But I think the days of repetitive haggling for discounts are fading away. Think how much time and money is spent by the operators on customer service reps who deal with those requests all day long.

IF D* does go that route and re price the packages and doesn't discount the first year ... I hope they decide to also eliminate the 2 year commitment.

 

[NashGuy]

IF D* does go that route and re price the packages and doesn't discount the first year ... I hope they decide to also eliminate the 2 year commitment.

Well, in making that prediction, I simply went over to dish.com and checked out how they price their packages (including HD DVR service) and what sort of up-front bonuses and special pricing they throw in. DISH doesn't really do any of that any more, at least for web sign-ups. (But I hear that they still offer Visa gift cards through direct mail ads, etc.)

DISH still requires a 2-year commitment, and they guarantee a price freeze on your service for those 24 months, but it's the same monthly price from day 1. The only freebie they throw in is a Google Home Mini (reg. value: $39; Black Friday value: $19), plus free pro installation and 3 free months of Showtime, Starz, etc.

Seems to me that if you're trying to figure out what DTV might do price-wise, the smartest thing to do is look at what their only direct competitor is doing. And given that DTV is making noises about cutting out discounts, simplifying their pricing and packaging, etc., I'd say it's a good bet that their new offer will be similar to DISH. Except that DTV will still have the special bonus of one season of free NFL Sunday Ticket when you sign that 2-year contract.

 

[Jimbo]

I didn't know that DISH had a 2 year commitment ...

 

[NashGuy]

I didn't know that DISH had a 2 year commitment ...

Yep. The cost of acquiring new customers -- especially when they have to install a rooftop dish and run wiring -- is too high to just let customers walk away after a few months when DISH is doing the installation for "free".

I don't know if they do this or not, but it would make sense to me that they would waive the 2-year commitment entirely if you agree to do a self-install. Maybe your house already has a compatible dish and wiring, so all you need to do is connect the receiver boes) at each TV. Or maybe you want to pay a third-party installer to do the job. In those cases, DISH (and DTV) could let you pay a small shipping fee to send you the receivers and you could subscribe to service on a month-to-month basis, turning it off and on as you like. Of course, you'd have to pay to ship back the receivers every time you turned it off or maybe instead pay some "dormant receiver lease fee" for every month you kept them without live service. And since you wouldn't be under a contract, you wouldn't have any sort of price freeze guarantee in place for any length of time.

 

[navychop]

Do you know what we do to folks that come up with new FEES in these parts?




Sent from my iPhone using SatelliteGuys

 

[NashGuy]

Do you know what we do to folks that come up with new FEES in these parts?

Ha! Well, you can't expect DISH or DTV to just let you indefinitely hold onto a receiver that you didn't buy from them if you're aren't actively paying for service, can you?

Bottom line is the customer has to pay for everything, including "free" installation and "free" hardware. It's all just a matter of how those costs are spread around, and to whom.

 

[Jimbo]

Yep. The cost of acquiring new customers -- especially when they have to install a rooftop dish and run wiring -- is too high to just let customers walk away after a few months when DISH is doing the installation for "free".

I don't know if they do this or not, but it would make sense to me that they would waive the 2-year commitment entirely if you agree to do a self-install. Maybe your house already has a compatible dish and wiring, so all you need to do is connect the receiver boes) at each TV. Or maybe you want to pay a third-party installer to do the job. In those cases, DISH (and DTV) could let you pay a small shipping fee to send you the receivers and you could subscribe to service on a month-to-month basis, turning it off and on as you like. Of course, you'd have to pay to ship back the receivers every time you turned it off or maybe instead pay some "dormant receiver lease fee" for every month you kept them without live service. And since you wouldn't be under a contract, you wouldn't have any sort of price freeze guarantee in place for any length of time.

I set up all my own equipment when I moved into my new (at the time) house ...
I called them and said I had it hooked up and have a picture (had the recvrs from previous house) ... they were a bit surprised, but Did turn it on.

 

[Jimbo]

Ha! Well, you can't expect DISH or DTV to just let you indefinitely hold onto a receiver that you didn't buy from them if you're aren't actively paying for service, can you?

Bottom line is the customer has to pay for everything, including "free" installation and "free" hardware. It's all just a matter of how those costs are spread around, and to whom.

Half the recvrs they don't want back any more anyways.

 

[NashGuy]

Half the recvrs they don't want back any more anyways.

Yeah. That was the case with my parents' old VIP722K with a busted hard drive. We just took it to Best Buy for recycling.

 

[mdonnelly]

My two year price freeze expired this month, and my bill went up by $75 to $185. I guess that I'm not a "Low ARPU Customer", because when I complained about the increase, they gave my a $60/month discount for 12 more months. My having at&t wireless and internet probably helps them make up for the discount.

 

[ncted]

My two year price freeze expired this month, and my bill went up by $75 to $185. I guess that I'm not a "Low ARPU Customer", because when I complained about the increase, they gave my a $60/month discount for 12 more months. My having at&t wireless and internet probably helps them make up for the discount.

yeah, you are not the kind they want to get rid of, especially as you bundle wireless and internet.

 

[Claude Greiner]

yeah, you are not the kind they want to get rid of, especially as you bundle wireless and internet.

Exactly. They care more about your cell phone than they do the internet or Tv.