There is no question as to the toll that the direct rivalry between DirecTV and its nemesis DISH Network is continuing to take on the company’s stocks. With discounts of up to 50% on certain packages the returns continue to take hit after hit. Much of the problem seems to be coming, not only from the stiff competition DirecTV faces from DISH, but also from the growing churn rate that the company faces.
A company’s churn rate is the rate at which the company loses relatively new subscribers. Many different factors including a poor economy and consumer reluctance at paying higher subscription fees are both playing into the increase in the churn rate that DirecTV is currently experiencing.
The increasing competition between the two companies has led to a complete change in the way the industry is viewed. In the past DirecTV concentrated its marketing on sports and HD programming as well as its DVR technology. Now the emphasis is being placed on the many available programming packages from which customers may choose.
While it has assisted DISH in providing a great deal more in the way of competition, it has also assisted DirecTV in realizing profits that might have otherwise been lost in this volatile economy. In a direct attack against DirecTV, its rival DISH released commercials that made alleged false claims. The matter has finally gone to court; however, the damage has been done.
Consumers are now taking a long hard look at the pricing structures being offered by both companies. This is where DirecTV is excelling. With the company’s ability to offer super low discounts it is not hard to see why both company’s bottom lines are rapidly coming into sight.
Where will it end? That is perhaps the biggest question. With DISH still offering a good deal of stiff competition it will be interesting to see how far DirecTV is willing to take this price war.
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