Directv Moves to Equipment Lease Platform in March

[RiseStar]

Directv Inc. has announced that they are migrating to an equipment lease only platform beginning March 1, 2006 in order to help reduce individual subscriber acquisition costs and increase subscriber retention. This will have an impact on new subscribers in that they will never own their equipment but will instead pay a monthly rental fee for as long as they subscribe to Directv. This model is identical to the cablevision industry, which has rented its converters and decoders to its subscribers, which is extremely lucrative over the long run.

The upside to this new plan is that it will allow customers to enjoy the latest technologies such as MPEG4 HDTV locals as well as high definition DVR's much more cost effectively as they will not be required to pay $800-$1000 for the special decoder. It will also allow future equipment upgrades and as well receiver repairs are all covered in the monthly lease. The downside is that subscribers over the long run may pay in rental fees much more than the receiver is worth. Additionally, the receiver will remain the property of Directv and the subscriber will bear the responsibility of keeping it in good condition and must be returned to Directv upon termination of their subscription.

Directv dealers are currently in the process of being advised of the change which will be in full effect as of March 1. After this date, it will no longer be an option to purchase new equipment outright as Directv will not compensate its dealers for sold equipment after this date, only leased equipment. In order to make a minimal impact on existing subscribers, Directv will be waiving the lease fee on a subscribers first receiver. All additional receivers will be subject to a $4.99 per month leasing fee. This fee will replace the $4.99 per receiver mirroring fee that multiple subscribers are currently already paying.

It is also interesting to note that all new leasing subscribers will be subject to a minimum programming commitment (contract), identical to those that new subscribers are required to sign into. Individuals wishing to subscribe to Directv without a contract will only be able to do so with existing owned equipment or by purchasing pre-owned equipment. Existing customers wishing to add additional receivers after March 1 will also be required to lease them from Directv. Directv has also indicated that they plan to continue to offer free standard installation to new subscribers.

This new policy will also have an effect on its DVR customers as well. A common modification for existing DVR subscribers has been to upgrade the DVR's hard drive. This however has tended to void the manufacturers warranty, so it is likely that new DVR customers under the lease policy will be prohibited from making any unauthorized modifications to their equipment as it will remain the property of Directv.

Directv has also indicated that they are not offering any guarantee of new equipment being provided to you at the time of your subscription. They are reserving the right to provide re-conditioned equipment to subscribers if new equipment is not available. This provision would allow them to recondition off-lease receivers and re-lease them to new subscribers. Because Directv is phasing out third party equipment, re-leasing reconditioned receivers would prove to be highly profitable.

[andypara1]

tankyou :)

[twwilco1]

This is a misleading story. Yes they will lease the cheap equiptment for 4.99 per month but for the nicer items Like high Def or DVR, you still have to pay for them and yet not own them. I think Direst TV is very misleading and false advertising.

[squawk101]

How much? I haven't heard any word on pricing, particularly on the HD DVR, which supposedly, is scheduled for release in a few months.

This is a misleading story. Yes they will lease the cheap equiptment for 4.99 per month but for the nicer items Like high Def or DVR, you still have to pay for them and yet not own them. . .

[bobs66]

How much? I haven't heard any word on pricing, particularly on the HD DVR, which supposedly, is scheduled for release in a few months.
the DD DVR for DTV has been out awhile now....started at 1000 bucks and has since fallen to around 300-400.....

[dodgeitman]

Individuals wishing to subscribe to Directv without a contract will only be able to do so with existing owned equipment or by purchasing pre-owned equipment.

I attempted to sign up a few days ago with owned equipment from a friend. Directv would not allow a non-commitment sign up for pre-owned equipment period!

They kept (spoke with two CSRs) talking about cell phone this and cell phone that and blah blah blah.

They were both working off a script and it didn't much seem to matter that in my case I was going in with no expense to them since my dish was paid for and self installed and the receiver had already been paid for as well.

What this amounts to is double dipping on Directv's part. The previous owner already paid for the equipment, and had his subscription more than long enough to offset any subsidy Directv may have put into his hardware.

The other issue that bugs about this new lease program is the up front cost they're charging on "leased" equipment. When I first heard of it, frankly I thought it was a bad joke, but it's not.

They want to compare their leasing plan with cell phones and the cable industry, but since when has cable charged customers a substantial portion of the price of the hardware on "leased" equipment?

Most don't charge a penny. In fact I couched that with a "most" but in reality I don't know of one that does.

This deal stinks for new customers, it stinks worse for present customers. The only one served by this is Directv. Here's my prediction, and it may be wrong, but I predict it's going to turn off prospective customers, and to make up for that Directv will increase commitment requirements for current customers to further lock them in like cell phone companies used to do. With "any" account change comes a commitment requirement tacked on. My guess is they'll start it off gradually and as less new customers come on board the more options they'll chose to tag a commitment to.

In any event since they insisted on a one year commitment I insisted on turning them down, so I stay with cable, and hating that option as well.

It's time for some regulating of the Satellite providers, because this is just ridiculous.

[electroboy3]

Greetings.
Here's what I know about the lease program. With the leasing program it does essentially work for both Customer and Company. The main goal of the lease program is to avoid the issue of having discarded, out-dated receivers lying around in closets, garages and basements. Howeiver, my Point of View is from the Protection Plan, which I am a customer of. Now, assuming most Technical Savvy people most likely opt out of the protection plan it is a very good tool. If a receiver is covered under the protection plan (simply goes faulty on it's onw, etc) it will be replaced at no cost to the consumer. Now.. .if it is not covered under the protection plan there's the option. If the the receiver is in Owned status the customer has to choose. If you would like to continue owning the receiver there is no more "discount". A replacement standard receiver is $149, dvr and hd is $349, and an hd-dvr is $749 plus shipping and handling and any applicable taxes. Now, a leased receiver will only cost the shipping and handiling and any tax on that 14.95 but you will get a comparable receiver. This is even better than the previous option of $49 plus s&h and tax for a non-protection plan covered standard receiver. In essence the price for a replacement remote control is more than it would be to replace a receiver that you took a hammer to and beat to death simply because your sports team did not win.

I do not see how the activation of any owned receiver (standard, hd, dvr, or hd-dvr) would cause any issues with activation. This SHOULD not be the case. This idea of leasing equipment is meant to "move" customer's towards leasing and not "force" customer's into it. If you experience any resistance in activated a receiver that is owned, please, just be persistance because you will avail and have an owned receiver. There should be no mention of an annual commitment on an owned receiver.

[squawk101]

the DD DVR for DTV has been out awhile now....started at 1000 bucks and has since fallen to around 300-400.....

I was referring to DTV's own (NDS-manufactured) HD DVR that is MPEG-4 compatible. I'm aware of the TiVo manufactured machine, this is not the machine that DTV will be focusing their leased equipment business model upon.

What minimal research I've done on this lease program, leads me to conclude that if DTV thinks they can "sell" their equipment & call it a lease b/c they also will collect a monthly rental fee, then going forward many customers will choose cable over DTV, whose HD DVRs may truly be leased. I just wonder who DTV thinks they're fooling?

More relevant, IMHO, is the fact that the current NDS equipment sucks. This is why I believe DTV just signed a 3-year ext with TiVo. I believe the engineers @ NDS are having a real tough time working out all the bugs in their software.

[knowabout]

This is a misleading story. Yes they will lease the cheap equiptment for 4.99 per month but for the nicer items Like high Def or DVR, you still have to pay for them and yet not own them. I think Direst TV is very misleading and false advertising.

You really need to learn more about what you are trying to comment on. Your information stated here is NOT accurate.

[Rambo 2]

Is it true that TV receivers are now required to receive the basic and/or local cable channels, so cable suscribers do not have to rent a cable box unless ppv is desired?

I like the pay as you go plan for cell phones. Only had one 'contract' for a 6 month duration way back about 12 years ago. Have been pre-buying minutes ever since then. Many people are going that route also as they get
closer to retirement.

Not too far from this topic... was briefly looking at a pay-per-view only system box sold at Sears last week. No contracts, just pay for the whatever ppv you select from your remote control... I think it may have been like on-demand also. Only connection was via phone line, so it must download the movie to the box on selection. I asked the sales person (as if they would really know) if he didn't mean connect to dsl or cable... and was told that it was only a plain ole phone line, but new technology and compression made the download really fast (???) I can't believe it. Can you?

To tie this back into the origonal topic, it is my prediction that DTV will lose customers and maybe go out of business if they continue on the course they seem to be on. Why would they want to emulate the cable rent-the- box plan when they present themselves as better than cable companies ?

I do like the option though, if they would continue to offer free upgrades in the technology as it has been advancing like the built in DVR, the high DEF,
(I would like) Dolby 6.1 surround or MMX, and would like the 3-D laser vision upgrade when it comes out.

[Rambo 2]

Haven't seen any other comments here in about a year.
And now the time is near.

Does anyone reading this know if my DTV - STANDARD DEF (owned) - receiver will still work in the year 2009?

Do you think that as HD takes over, DTV is 'thinking of the customer' and 'trying to make it easier for the customer' offering lease options as
as simple transition tool?

Okay, since none of these is probably going to get answered, it won't hurt
to throw down another one: If I purchase (to own) a newer receiver now
with HD and DVR, will my current access card work in it after a phone call?

[JackGage]

Read your customer agreement form! I have learned my lesson. I will NEVER be a DirecTv customer again. I had been a customer for 8+ years and now they screw me over. I ended up having to purchase a DVR from BestBuy in Dec 06 due to my older DVR stopped working. I was not informed that when I purchased it that it was considered leased equipment for 2 years.

I unfortunately had to stop using Directv because due to where I now live, I cannot access the other satelite. Since I am disconnecting service after a year, I am being charged $162 early cancellation fee. Again -- who reads the customer agreement form.

Also, I had my credit card number on file for my convenience to pay the monthly fee online. Directv charged my credit card for remaining 'fees'. Again, according to Directv, it states in the customer agreement form, they are authorized to charge any card on file for remaining fees when the account is disconnected.

Directv has become SkyNet....what they are doing is deceptive and they definitely don't care about their customers.