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What’s Wrong With DIRECTV’s 2-Year Contract?

Q. I am interested in DIRECTV’s ‘Choice’ offer for new customers. It’s $45 a month for more than 180 channels. And, you can get HBO and the NFL Sunday Ticket for free for one year! 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.

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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.

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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.

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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.

Plus, the second year of that two-year agreement comes with a sharp increase in price. For example, the Choice plan you refer to may be $45 a month for the first 12 months, but it jumps to $110 for months 13 to 24. And that doesn’t include your regional sports fee, which is nearly $10 a month extra!

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.

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— Phillip Swann

About TV Answer Man (1687 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.

7 Comments on What’s Wrong With DIRECTV’s 2-Year Contract?

  1. celticpride // May 15, 2019 at 6:09 pm // Reply

    dish tv offers a 2year contract starting at $59.99 a month for 2 YEARS Why doesnt directv do that also?

  2. As a current long time DirecTV customer, I was given no choice but agree to a 2 year commitment to get 4K service. I refused. I will not be forced into Devil’s agreement just to get a small improvement in picture. Furthermore, DirecTV only offers 3 channels in 4K.

    I suffered through hours on the phone with DirecTV only to be lied to again and again. I was told if I bought the Protection plan, I would be able to upgrade to 4K for free. A lie. I was flatly told I couldn’t upgrade to 4K on one phone call. Another time, I was told I could upgrade to 4K only if I paid nearly $800 for the 4K equipment up front. Many of these promises came from Customer Retention, because they no the CSR that makes the promise can never be held accountable for it.

    I plan to move to Cable TV to avoid 2 year plans. DirecTV is terrible.

  3. Bob,
    LOTS of truth in your comments.
    Since the Customer Service moved OVERSEAS,
    you can NOT count on anything from DirecTV
    Good thing you refused 4-K, I tried it with NetFlix, ( I have 200 MBPS from Spectrum)
    could NOT see much difference between HD on MY 4-K TV which UP Scales HD

  4. Well come too realty ever one 4k,what Snake ‘S lie about the trur picture!!
    If you all buy an outdoor combination vhf/uhf tv antenna set-up
    And phone internet connection with an Amazon fire stick.
    It’s all you need to see your movies and sport’s and NO more black outs!!
    Have a great day everyone!!!

  5. Ronald Kohlman // May 18, 2019 at 1:21 pm // Reply

    I was a 15 year DirecTV customer. I switched to Dish this past February. My bill was sky rocketing with DirecTV and when I called they only offered me a $15 discount for 12 months. Small discount for $226.12 a month charges. Got tired of the extra fees as well, like that stupid regional sports fee, mine was almost $7 a month. At least with Dish I have my 2 year price guarantee and I get sub channels and other channels that I didnt get with DirecTV. The Hopper 3 is quite amazing as well. Glad I made the move.

  6. What did DirecTV charge $ 226.12 for ?
    Was this a Bar ? with 25 TV’s ?

    • Ronald John Kohlman // May 20, 2019 at 7:03 pm // Reply

      premiere package with dvr / hd / 4 tvs / regional sports fee / taxes ……believe it or not it adds up quick!

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