It really has been a sinking ship ever since AT&T forked over $49 billion to purchase DirecTV in 2015, as the satellite TV provider has continued to suffer from massive subscriber losses quarter after quarter.
The company’s most recent earnings report failed miserably to reverse that downward trend. All told, AT&T shed 897,000 premium TV subscribers, which mostly includes its DirecTV users and a small number of U-Verse customers.
The company, which also saw its CEO Randall Stephenson step down, said it would be moving ahead with a wide-ranging cost-cutting program.
So, this begs the question: What is driving this mass exodus from DirecTV? Here are five likely reasons why these once-content customers are heading for the exits.
First off, the fluctuations in the pricing really get to customers. Sure, the initial promotional offerings of $40 or $50 seem like a nice bargain, but after the two years pass, you’re likely paying north of $100. For many Americans, this just doesn’t fit into their budgets, and they frantically search for a way out.
The rise of online streaming platforms like Netflix and Disney Plus has given control back to the customers. There are no contracts, and if they want to switch, no problem. You’re paid till the end of the month and the relationship ends – just like that.
That touches on the second big reason, which is the unnecessary pain that people have to go through to cancel a subscription contract. Try calling and you’ll likely have to sit on hold for an hour or longer, and once you do get connected to a representative, you’ll get the runaround about how you shouldn’t cancel and that there would be all these extra fees.
That’s the one thing they’re not lying about: fees. If you do cancel a DirecTV contract, you’ll have to pay $20 for each month remaining on the agreement, in addition to a $15 deactivation fee. If you have a year left on your contract, that’s a lot of money just flying out the door for nothing in return.
Reason No. 3 sticks with these ridiculous fees. Although the fee for the first receiver is waived, each additional one costs $5 per month. If you take the time to read the small print, you’ll also be paying on a monthly basis $10 in HD access fees and $6 in DVR service fees. With all of this nickel and diming, no wonder people are rushing to find alternatives.
The next reason is more of a cultural factor, and it goes back to the rise of streaming cable alternatives. The younger generation knows these services well and they have already been ingrained into today’s popular culture. Ask any teen, and they are viewed as cool and modern, a type of branding that’s hard to come by for an ancient player like DirecTV. Sure, the older subscribers may stick it out, but it is incredibly difficult to see millennials jumping at the chance to sign up for DirecTV.
Finally, for the fifth reason, DirecTV also lacks the new and edgy content that today’s general population desires. People are going out of their way to watch Netflix’s “Tiger King” or Hulu’s “The Handmaid’s Tale,” and as long as these streaming players continue to create amazing content, the audience will always be there. However, the same can’t be said for DirecTV.
Ethen Kim Lieser is a Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek and Arirang TV. He currently resides in Minneapolis.