The Satellite Television Pricing Wars - By: Jonathan Baldwin

Competition is a natural part of business. That said, in satellite television the price wars have been a constant battle for supremacy, that is slightly more complicated than simply the barebones lowest possible price. The composition of the packages is of great concern to the average customer, so aside from the number of dollars, each company has played their hand at a number of channel selections and enticed customers with various strategies. Dish Network is winning the battle for the lowest possible price, as they offer enticing introductory rates often dipping as low as $10 a month for the first year or other extremely low offerings, coupled with a decent number of channels often anywhere from 60 to 100. One wonders then, why DirecTV has made little in the way of comparable pricing efforts to hook in customers with low prices. The average television customer starts with one of the lower priced packages, then upgrades over time as they desire new channels. So to one of those individuals, Dish Network would be the quick choice, and DirecTV, by not making a comparable effort to ensnare the consumer who is mostly concerned about price, is losing out on that potential customer. These consumers may also upgrade in the future, so if DirecTV is concerned about mark-up, they should reconsider that in the longterm there are potential upgraders in the bunch. If you look at the plans, Dish Network truly defeats DirecTV in terms of price. It's baffling that DirecTV has not made bigger efforts to fight back against Dish Network's aggressive price cuts. I was hard pressed to find a single package DirecTV was better priced on with similar numbers of channels. The only way they could outsell Dish Network would be by other methods, such as focusing on converting users from cable television to satellite. However, over time, that source of customers will become a smaller and smaller group to choose from. Instead DirecTV must look to ways to win over customers from their competitor. If they do not desire to lower prices, and are focused on increased markup, then perhaps DirecTV should offer a discount solely for Dish Network customers who switch to them, or some other method to entice Dish Network customers. Otherwise, DirecTV risks losing their own customers to Dish Network's lower prices without making any attempts themselves to woo over their competitor's subscribers. Perhaps short term focused executives at DirecTV have been considering the quarterly profits rather than the long term growth of their customer base. A quick remedy could be made with an aggressive price campaign targeted specifically at their competitor's customers, offering a special rate for those who switch. Otherwise, customers might not find any reason to do so. Score one for Dish Network.