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Pay TV Service: Should I Sign a 2-Year Contract?

Q. I’ve been thinking about signing up with DIRECTV for its Genie Whole Home DVR service. DIRECTV says it will install it for free if I agree to a two-year contract. They said I would even get the NFL Sunday Ticket for free for a year. Should I do it? — David, Boston.

That may sound like a great deal — and it is, actually. But here’s the problem. If you sign a two-year agreement, you’re stuck. If you want to switch TV providers during that time, you’ll have to pay an early termination fee. And sometimes that can be hundreds of dollars.

And this is not just DIRECTV. It’s every TV provider who offers ‘special’ two-year agreement deals.

Now you may say, hey, I plan to stay with DIRECTV for two years or more anyway.

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Well, that’s cool, but what if DIRECTV has a fee fight with your favorite channel — say, NESN, the regional sports channel that airs the Boston Red Sox — and is forced to take the channel off the air? Indefinitely.

Hopefully, that won’t occur, but if it does — and you want to switch to Comcast so you can watch the Sox — you’ll have to pay that early termination fee.

And what if DIRECTV suddenly decides to dramatically raise its monthly subscriber fees a year from now? Under any subscriber agreement, it can and there’s nothing you would be able to do about it. Unlike a customer without the two-year contract, you couldn’t switch to a different TV provider unless you paid that punitive termination fee.

I’m not saying DIRECTV is likely to significantly raise its fees in the next year, but you never know. When you’re in the two-year contract, you’re exposed to the possibility with little recourse.

Finally, if you’re not in a two-year agreement, you’ll have more power to negotiate with your TV provider for deals while you’re a customer. If your TV provider knows you can switch anytime you want without a financial penalty, it will be much more receptive to offering you something to stay on board, such as three free months of a premium channel — or who knows what. If you call them and say you’re thinking of switching, it will get creative, trust me. (Just don’t do this too often; your TV provider will catch on and be happy to see you leave.)

So avoid the contracts, David, and keep watching the Sox no matter what happens.

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And if you have a question for the TV Answer Man, send it to: swann@tvpredictions.com

About TV Answer Man (703 Articles)
The TV Answer Man is veteran journalist Phillip Swann who has covered the TV technology scene for more than two decades. He will report on the latest news and answer your questions regarding new devices and services that are changing the way you watch television.

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