Q. I’ve been a subscriber to DIRECTV for 15 years, but I am thinking of getting rid of it and I think a lot of people are. I am also wondering if DIRECTV can survive the Coronavirus outbreak. I mean, why would anyone call a dish guy out now to install a dish and receiver. It’s way too risky. Just stream stuff instead. What do you think? — Gordon, Nashville.
Gordon, AT&T, which owns DIRECTV, has stated that it is following CDC guidelines for protecting both its employees and customers during the Coronavirus outbreak.
That said, unlike Dish and some other pay TV providers, AT&T has not specified which steps DIRECTV installers are taking to ensure a safe home visit such as requiring them to wear gloves as much as possible, and cleaning or sanitizing surfaces they touch in or outside the home.
AT&T would be wise to publish any extra measures its installers are taking, in my opinion. But the telco doesn’t seem to value my advice on this and other customer concerns.
Regardless, for two reasons, DIRECTV would seem to be more vulnerable to a business decline due to the virus outbreak than any other pay TV provider.
1. Fear Of the Installer
Whether AT&T explains how it’s ensuring a safe home visit or not, many Americans are afraid to request any service people to come to their home now, even ones that might be bringing food. So summoning someone to deliver more TV channels suddenly seems like a luxury you can’t afford or risk. As you note, Gordon, the average person may conclude it’s safer just to watch Netflix, assuming he or she has a decent Internet service.
(There’s always a flip side, of course. AT&T’s new Internet-based TV service, AT&T TV, does not require an in-person installer; the company sends you a set-top which you install yourself. This could help drive interest in AT&T TV.)
But the fear of the installer, be it rational or not, could trigger a huge decline in new subscriptions for DIRECTV at a time when the satcaster is losing old customers at an unprecedented rate.
Other pay TV services, such as Comcast, are now facing this challenge as well. But unlike DIRECTV, the cable TV and telco TV services can offer Internet service with their video plans. With many people stuck at home due to the outbreak, the Internet is not a luxury; it’s a must-have. Consequently, despite their fears, consumers will likely be more inclined to request a new installation visit for cable. The need offsets the risk.
Dish, the nation’s second leading satellite TV service, has a problem here, too, because it doesn’t offer a companion Internet plan, either. However, Dish’s recent subscriber decline is a fraction of what DIRECTV has suffered so a falloff in new subscribers will have less impact. And that leads me to reason two.
2. Many DIRECTV Subscribers Are Considering Leaving
As you noted as well, Gordon, many DIRECTV subscribers have stated on social media sites that they plan to drop their service once their two-year contracts expire. You might argue that this is a small subset, but the fact that DIRECTV lost nearly one million subscribers last year strongly suggests there is great unrest there.
So if DIRECTV’s new subscriptions drop to nearly zero, and a large number of current customers drop service, the satcaster’s number of subscribers (thought to be around 16 million in January) could dramatically shrink in the coming months.
(Again, there is a possible flip side. When a DIRECTV subscriber cancels service, he or she has to return the satellite receiver. This could require a trip to the UPS store, and many people might be reluctant to do that now.)
The Coronavirus is creating trying times for everyone, including the leading players in the pay TV industry. But if the outbreak lasts for months, and not weeks, it could be the beginning of a quick end for DIRECTV.
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