DirecTV changing the rules?

[Andrew8468]

I took a run across the border today and was looking around in various stores and heard something interesting. A salesman at an electronics store was saying that installation was part of the purchase price. That when you pay for a system, it stays at the store until an installer signs for it and brings it to your home to set it up. Anybody else heard about this?

[zcubed]

Hmmm....Doesn't sound logical to me. What about people who are buying a second unit, or buying one as a gift, or buying one for the deer lease, or they are do-it-yourselfers and don't want some high school kid crawling around on their roof, etc., etc. I would think that would be a bad business decision for dtv to do something like that. Now, i can see them offering that service, and if someone chooses to have it installed, them then saying that they will deliver the unit upon installation. But, i can't see them mandating installation as a requirement to get a system.

the rs in my area offer the instalation free if you call dt# after purchase they will hook you up.


this guy want's to make sure the unit is installed and activated so he doesn't get charged back.

if you activate he get's the charge back fee,and he get's a monthly commission as long as the customer stay's active and paying.

HOW ELSE WOULD THIS BE PROFITABLE?

i have a good friend that was a small dealer and that's where i got the info from.

small guy's can't afford to take the large chargeback and expect THE NEW ACTIVATION REBATE AND the small commision's from those that he sign's up to cover the loss.



however large dealer's like rs,wallmart etc,look at the long term revenue of those that do activate as a revenue stream that will pay out at some point.

they probably have a better deal with the non activated charge back's than the small fry and can see a pay back in a fairly short time even with the charge back's.

the big guy's have a good idea what% of ird's won't be activated.

they take that # x the charge back cost,and that is there investment/cost.

the rebate on the activated unit's will cover some if not all the cost of the non activated unit's with the payoff period being determined using the commision income.

it's a whole separate business.

YOU HAVE TO HAVE BIG MONEY TO COVER THE INITIAL LOSSES BUT EVENTUALLY THOS LITTLE COMMISION CHECK'S ADD UP BIG ON THE BIG SCALE WE'RE TALKING ABOUT.

THE ECONOMIES OF SCALE

that's why you'll find a variety of offer's and stipulation's.

many have said rs want's id,etc.

but i bought from one,nothing required,you pay cash give them name address phone #.that's it.


rs was moaning that they wewre taking a loss when there quartely figure's didn't meet goal.

they blamed it on nom activated dt# system's.

so why can you still find some of there dealer's selling without id?

it explain's away the underperformance but if it were true some head's should role.


the one's that calculated the payout.

nobody's head is rolling because it's just a bs excuse that they can document to the wall street analyst/shareholder's.

if they stop the practice of no id's they will eliminate the cost and the revenue from the activation's will pay for any loss and then it'll be gravy time.

jmo[Edited by EAO on July 7th, 2001 at 11:12 PM]

[moon73]

DTV was charging Radio Shack dealers $200 a piece for those boxes that they were selling $50. Then after the buyer subbed ,DTV would rebate the dealers. Of course most buyers didn't sub and RS was losing money on the deal. They were showing a loss each quarter. That is why they are making sure the boxes don't leave unless there is a commitment to DTV. Heard this on one of those in-house RS shows.

Originally posted by moon73
DTV was charging Radio Shack dealers $200 a piece for those boxes that they were selling $50. Then after the buyer subbed ,DTV would rebate the dealers. Of course most buyers didn't sub and RS was losing money on the deal. They were showing a loss each quarter. That is why they are making sure the boxes don't leave unless there is a commitment to DTV. Heard this on one of those in-house RS shows.

i didn't want to say it above because i didn't remeber exactly what i was told by the now former dealer/close friend.

he was supposed to hook up and activate my system but didn't get back to me for over 3 month's.

when he finally stopped by he wanted to know if i activated it. i told him no that he said he was going to do it.
he said he was going to get charged back i think 250 per unit.

so the comment's above seem on the money.

they are not activating more box's than non activated one's they sell.
therefor an immediate loss show's but they still have the commision's from the activation's from day 1.
there little dt# business is still running a profit from that.
they use that commision revenue in there projected earning's goal.

any budget by line item has item's over and under the projected amount's.

you successfully handle your budget as long as the bottom line doesn't exceed the allocation.

when they fall short on the overall projection of income a reason has to be given to market analyst and shareholder's.

so they have a loss based on activation's vs non activated unit's.
it stick's out like a sore thumb.

so a solution must be developed to stop the problem.

easy make id and cc necessary.

this has been going on for quite some time,several quater's. yet there are still dealer's selling without the id and for cash.

it might v ery well be based on individual store acxtivation vs non activation's.

if your store is selling and getting more than 50% acxtivation's your ok to sell witghout id,cc. if your activation's are below non activated unit's sold you must require id,cc.

bonuses are paid on overall profitability,so even if your doing well and activating more than not,if you impliment the id policy you will add to your profitability because yoiu'll have less charge off's.

your not too smart if you know how to stop the bleeding and ignore it,or you have other reason's for doing so.

Originally posted by moon73
DTV was charging Radio Shack dealers $200 a piece for those boxes that they were selling $50.

Not quite. The vendors (Thomson in RadioShack's case) do sell the systems wholesale to RadioShack (and other retailers for that matter). Every IRD's serial number and access card CAM ID are held in a DirecTV database, and is tracked against activation after sale to the end user. However if the cash and carry buyer doesn't activate, and the retailer is unable to supply buyer ID, DirecTV charges back the vendor $250.00 after some set period (generally 30 days), who in turn would presumably charge back the retailer the same amount. Depending on a retailer's volume, and the activation rate from that retailer, it's probable some vendors were quietly eating the loss on their own, as in the case of large accounts with high volume retailers such as Good Guys, Circuit City, Best Buy, K-mart and Wal-Mart. Combined, those five mass merchandisers do far more volume than RadioShack does nationally. Not content merely to collect the loss out of the vendor's and perhaps a retailer's hide (i.e RadioShack) - after all $250.00 would approximate the yearly subscription fee for the "Select Choice" package - DirecTV began taking the threat of hacking more seriously. So collecting a CC and/or SSN number became mandatory for U.S. RadioShack's continued distribution of DirecTV equipment around the first of the month, and it's now in the fine print of their monthly fliers' DirecTV ads. This was a joint extortion, er, decision, between RadioShack and DirecTV to their mutual benefit, and presumably it'll be spreading to other U.S. retailers who wish to continue distributing DirecTV equipment, too. The timing of this tightening the distribution pipeline with News Corporation's expected acquisition of DirecTV in the near future shouldn't be dismissed as mere coincidence either. Two things on this anticipated acquisition: 1> Rupert Murdoch is not known for his charitable attitude towards larceny, and, 2> News Data Services (NDS) is a wholly owned subsidiary of News Corporation. DirecTV has effectively been in bed with Murdoch's empire from day one. As this arrangement spreads (and it will), from the retailers' and the vendors' perspective, they'll take comfort in being off the hook regarding chargebacks, and DirecTV has set in motion procedures that'll eventually tighten the supply of cheap virgin access cards to hackers. So, has DirecTV changed the rules? You better believe they have.[Edited by seymour_teevee on July 8th, 2001 at 04:42 PM]