Q. I’ve been thinking about signing up with DIRECTV for its $50 a month plan (“Choice”). You get 185 channels for just $50. Plus, DIRECTV says I would even get the NFL Sunday Ticket for free for a year. Should I do it? Are there any catches? — Gene, Dunkirk, Maryland.
Gene, that may sound like a great deal, 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.
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And sometimes that can be hundreds of dollars.
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DIRECTV charges $20 for every month left in your two-year agreement from the point of cancellation. For instance, if you decided to cancel six months in, you would have to pay $360 in penalties.
And this is not just DIRECTV. It’s every pay TV provider who offers ‘special’ two-year agreement deals. They all require termination fees. (This is one reason why some people are signing up for the new live streaming services such as DIRECTV Now, Sling TV and PlayStation Vue; they permit you to cancel anytime without penalty.)
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Now you may say, hey, I plan to stay with DIRECTV for two years or more anyway.
Well, that’s cool, but what if DIRECTV has a fee fight with your favorite channel — say, MASN, the regional sports channel that airs the Washington Nationals and Baltimore Orioles — 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 Nats and/or the O’s — you’ll have to pay that early termination fee.
And there’s another catch: If you read the small print of that $45 a month offer, DIRECTV will raise your monthly bill to $105 a month in months 13-24 of the two-year agreement. Plus, you will have to pay an extra $7.49 a month in regional sports fees.
If you want to cancel after your bill goes up in month 13, you’ll have to pay the early termination fee.
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, Gene, and keep watching the Nats and O’s no matter what happens.
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You are being critical about the contract but what about the customers that are with the local cable provider who don’t have a price in writing that are paying twice that and never really know what the bill is because it’s different every month. If you go with dish or direct TV at least you know what your going to pay
Cheaper to pay the $20/month ETF than the increased fee at the end of your 12th month. So…threaten to leave and pay the ETF. DIRECTV will probably give you a deal to continue your commitment.