News Ticker

Why Does DIRECTV Require 2-Year Contracts?

Tilted view of satellite dish on white multi-story house --- Image by © Royalty-Free/Corbis

Q. I am interested in DIRECTV’s new offer for new customers. It’s $35 a month for more than 150 channels. But I read that the deal requires me to sign a two-year contract and if I leave before the two years are up, I have to pay big. Why do TV services require these contracts? The new streaming services like Sling TV don’t do this. Seems like the contracts would discourage people from signing up. — John, Cincinnati, Ohio.

John, DIRECTV, like other companies, both in and outside the TV business, use two-year agreements to keep customers from service-hopping. Without them, DIRECTV’s subscribers might switch to Dish or their local cable provider every time something bad happens, such as a channel blackout during a programmer fee fight or an increase to one’s bill.

Blu-ray Movies: Under $10 each at

The two-year contract, which can’t be broken unless the DIRECTV subscriber agrees to pay roughly $20 a month for the remainder of the agreement, serves as a virtual handcuff.

Click Amazon: Today’s Top-Selling TV!

Of course, not every DIRECTV subscriber has a two-year agreement. DIRECTV only requires them if the customer accepts a promotional offer, such as a cheaper monthly bill as you referred to, or free installation of an advanced HD DVR that might offer 4K programming. But many subscribers agree to the two-year deals because the offers can seem irresistible.

Click Amazon: Today’s hottest discounts in Consumer Electronics!

Again, this gives DIRECTV (and other pay TV ops) greater flexibility and confidence when negotiating programming agreements, or announcing monthly price increases.

For instance, let’s say DIRECTV is negotiating a new carriage agreement with ESPN, but the sports network is demanding a fee higher than the satcaster wants to pay. If the talks breakdown, and ESPN pulls its signal from DIRECTV, many sports fans might be tempted to switch to another service. But if they are still locked into a two-year contract, they will think twice before paying what could be hundreds of dollars in termination fees.

Another reason why DIRECTV requires two-year agreements? Moolah! Yes, some subscribers are forced to break their two-year deals prematurely for all kinds of reasons, particularly economic. DIRECTV collects a tidy sum every year from termination fees.


We don’t know exactly how many DIRECTV subscribers have two-year agreements, but considering how aggressive DIRECTV is with promotional offers, it’s likely to be a significant number.

I have counseled here not to sign a two-year agreement, even if a promotional deal seems particularly sweet. In my view, the two-year agreement serves the company more than the customer.

Need to buy something today? Please buy it using this link. This site receives a small portion of each purchase, which helps us continue to provide these articles.

Have a question about new TV technologies? Send it to The TV Answer Man at Please include your first name and hometown in your message.

— Phillip Swann

About TV Answer Man (1503 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.

2 Comments on Why Does DIRECTV Require 2-Year Contracts?

  1. I also think it depends on the agreement you have. Google Fiber recently launched in my neighborhood, forcing Comcast’s hand, who dropped their Extreme Premier Triple Play bundle to a ridiculously lower price than what I was paying before. I was HAPPY to sign that 2 year deal, which actually gives me a locked in price for three. I get the point about it serving the op more than the customer, but I did luck out the one time.

  2. If everyone just refused to accept the 2 year contract I believe direcTV would rethink their way of doing things. Just as I wonder if everyone that wishes to leave a comment refused to sign in so you could have everyone’s personal information, would you stop forcing them to sign in before leaving a comment?

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: