TV Answer Man, I have been a DIRECTV subscriber for years and years and I know they have been sold but do you think it will matter? Will the company go out of business at some point? — Gerry, Easton, Maryland.
Gerry, you’re right. AT&T, which owns DIRECTV, has sold a 30 percent minority stake in the satcaster to the private equity firm, TPG. When the sale closes sometime in the second half of the year, DIRECTV will become a separate company with a new board of directors and executive team consisting of former AT&T executives and possibly a TPG placement or two.
Many analysts have opined that the sale is just prelude to an eventual merger of DIRECTV to Dish, or in a worse case scenario, the dissolution of the company in the coming years. DIRECTV has lost several million customers since AT&T purchased it in 2015 and the growing competition from streaming services could generate many more defections in the next few years.
But regardless of whether the satellite TV service merges with Dish (a likely outcome in my view), I think there are some steps that the ‘new’ DIRECTV can take to succeed in an increasingly difficult environment.
Basically, DIRECTV needs to offer services and programming that can’t be found on the live streaming services such as YouTube TV, or the subscription VOD streamers such as Netflix or Hulu. When you’re asking your customers to pay $100 a month or more, you better provide something they can’t get anywhere else.
So what would that be? Here are some ideas:
1. Keep the Sunday Ticket
The NFL is now negotiating for the next contract to carry the NFL Sunday Ticket. (DIRECTV still has it exclusively for the 2021 and 2022 seasons.) While it would be cost prohibitive for the new DIRECTV to retain the Ticket as an exclusive, the company could afford (and benefit from) sharing the package with a streaming service, such as Amazon or ESPN+. Keeping the Sunday Ticket would help football fans justify paying a premium price for DIRECTV.
2. Add 4K Channels
Live 4K programming is still a relative rarity on the streaming services. (FuboTV offers occasional 4K events produced by Fox while YouTube TV says it will offer live 4K programming at some point.) DIRECTV, which now has three 4K channels which air both live and recorded 4K programming, should add several more. The satcaster should become known as the pay TV service to get if you want 4K. There are millions of 4K TV owners thirsting for more 4K content.
3. Get Rid of the Contracts!
Live streaming services have enjoyed modicum success for two reasons: Cheaper prices and no contracts. While DIRECTV is likely unable to lower prices due to escalating programming fees, it could jettison those onerous two-year agreements which come with stiff penalties if you cancel early. DIRECTV requires the contracts in part because of the cost of installing the satellite dish and receiver, but there has to be a way to resolve that. Consumers are sick to death of being forced to enroll in long agreements just to watch television.
4. Carry Every Sports Channel You Can
DIRECTV used to be known as the sports leader in the pay TV category before AT&T walked in. Suddenly, coveted sports channels were removed and others were never added after launch. That has changed in the last year or so as AT&T has made it a priority for both DIRECTV and AT&T TV to carry the regional sports channels as well as other sports networks. The new DIRECTV should continue that trend and add any sports channel worth carrying. Let sports fans know that they won’t have to struggle to find a favorite sports channel if they subscribe to DIRECTV.
5. Focus On Rural Markets
Many rural residents still don’t have access to high-speed Internet, making streaming an unviable option. While both private and public entities hope to change that in the coming years, these markets are now tailored made for DIRECTV and Dish.
6. Spend More On Customer Service
In the pre-AT&T days, DIRECTV was regarded as having one of the nation’s best customer service teams. That reputation has been tarnished due to neglect and a lack of investment by AT&T. The new DIRECTV should again make customer service a priority.
Gerry, those are just a few ideas. I would like to hear what you and other readers would like to see from the new DIRECTV. You can record your suggestions in the comments section below.
Until then, happy viewing, and stay safe!
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— Phillip Swann