How many customers cancel DIRECTV?
DIRECTV is one of the leading pay-TV operators that offers satellite television service in the United States; at the beginning of 2018, the company had approximately 17 million customers across the country. However, like any other firm, it also has a certain rate of customer churn or customers who cancel their subscriptions. Okay, but how many of these DIRECTV consumers disconnect their services from this company?
While it is possible to find various statistics and prognoses, the exact cancellation rates are not disclosed by DIRECTV or its owner AT&T Internet. But it is not about that, we can approximate churn rates based on certain data that we have. The satellite TV industry in particular has been experiencing some turbulent times in the recent past with the increased availability of streaming video alternatives such as Netflix and Hulu. It has led to more customer churn in the industry because competition has become even stiffer with so many players.
DIRECTV’s paid subscribers reached 36.1 million in 2019, 0.6 million less than in 2018, while the number of premium TV customers dropped to 27.5 million in 2019, after decreasing by 1.2 million in the prior year, as shown in AT&T’s quarterly reports. This suggests had been churning out at a rate of about 6-7% in the past recent years. Most of these ex-customers possibly lastly churned because of the growing emergence of cheap streaming services. However, DIRECTV attributes some of it to no new promotion initiatives and a higher credit standard measure as well.
Surveys have shown that the primary factors contributing to customers canceling DIRECTV include: Surveys have shown that the primary factors contributing to customers canceling DIRECTV include:
- Price hikes: Like their counterparts in other pay-TV firms, DIRECTV has gradually increased the prices of programming packages over the years. Such costs are higher and encourage some of the subscribers to abandon their cable TV subscriptions.
- Contract disputes: Temporary channel blackout due to content provider disagreement leading to minor disagreement from users results in channel cancellation.
- Poor customer service: Some customers lose patience and quit the DIRECTV internet service due to long waits for services and unpleasantries when communicating with the customer support representatives.
- Switching to streaming: Simplicity for watching with lower monthly costs and the flexibility of streaming is enticing more conventional TV viewers to shift away from satellite/cable packages.
- Moving residences: DIRECTV is intended for professional installation and has certain literacy – the dish must be installed in the direction of the southern sky. This type of churn is normal and occurs when customers move houses or offices and are unable to take their service with them.
Although the churn of 6-7 % per year is still higher than what DIRECTV prefers, it is still a slight step below the average industry churn rate. A satellite rival of DISH Network stated that the company was shedding about 9% of its customer base in 2019. However, most cable TV providers witnessed even steeper customer erosion of 10-15% and more in the recent past.
Therefore, what is DIRECTV doing to attempt to lessen the cancellations and increase customer loyalty? Their strategies include:
- Giving customers opportunities to subscribe on more favorable terms: get a promotion or discount on a monthly subscription. The introductory offers are a good way to attract clients and keep them coming back on board.
- Offering premium channels such as HBO and Starz without charging the subscriber for a certain length of time. This makes the users spend more time on the site in a bid to make the most out of what is available online.
- Bettering the customer experience, by devoting more resources to call centers and other forms of self-help to avoid extended periods of irritation and impatience.
- Offering additional satellite TV packages including AT&T Wireless and Internet packages to appeal to consumers.
- The good news is that AT&T has more ways than ever to stay connected – from DIRECTV NOW streaming packages to 4K-ready equipment.
However, the long-term trend for traditional pay TV is negative, and therefore DIRECTV has been making small changes to its services to reduce customer cancellations. While operating under intense competition, their churn rates still rank as some of the best in the market. Therefore, the management of churn will be a big factor in the future, as the threats posed by other video streaming alternatives continue to rise.
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