Yesterday, DISH Network Corp. (DISH), the second largest satellite TV operator in the U.S., launched a value-themed campaign targeting its closest rival DIRECTV (DTV) customers.
With the program, DISH assures $250 of savings per annum to all DIRECTV customers for the same programming and services they are presently availing if they choose to switch over to the former’s network. Toward this end, DISH has set up a website, dishchallenge.com, where DIRECTV customers can register for the promotion, which runs through Apr 8.
DIRECTV subscriber, interested in the offer, have to sign up on the website, following which the subscriber needs to commit to a 24-month contract with DISH and submit documents for a credit check and other essential papers. After the first year, if customers find that savings amounted to less than $250, they have to submit their last monthly DIRECTV bill for online verification to DISH. Users will receive a $250 prepaid card if their claims proven to be true.
DISH believes that this strategy will help it to lure high-valued cost-conscious customers from DIRECTV. However, we remain sceptical about this strategy. DIRECTV is currently awaiting regulatory approval on its acquisition by the U.S. telecom behemoth AT&T Inc. (T). If the deal clears regulatory hurdle, DIRECTV subscribers may be offered attractive bundled triple or quad-play (wireless, high-speed Internet, fiber-based video and satellite TV) services at reasonable prices by AT&T.
A few days back, DISH commercially launched its Internet TV service called “Sling TV” offering a handful of channels including ABC, CNN, TNT and ESPN for just $20 per month. The company’s new venture in the video streaming market is targeted to compete with Netflix Inc. (NFLX), Hulu, Amazon.com Inc. (AMZN) to minimize its customer churn rate.
Over the last three years, DISH has made several technological advancements related to its video delivery. The company introduced a HD whole-home DVR called the “Hopper” which enables users to watch TV shows and movies in 4 different rooms simultaneously and record 6 HD shows at the same time. It also introduced a new feature called AUTO HOP, which allows any DISH subscriber to record prime time TV programming and view those shows without advertisements.
Over the last couple of years, the internal dynamics of the U.S. pay-TV industry have been gradually shifting from cable and satellite TV operators to low-cost over-the-top service providers. The strong presence of online video streaming providers is posing significant threat to the existing pay-TV business model.
Meanwhile, cord-cutting has become a serious concern for major pay-TV operators. At this juncture, DISH is leaving no stone unturned to remain competitive.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment