News

DBS Promotes Multi-Room System Discounts

3/31/2002 7:00 PM Eastern

In separate consumer promotions, direct-broadcast satellite companies DirecTV Inc. and EchoStar Communications Corp. are trying to convince potential subscribers that it's not as expensive as it used to be to get DBS signals to multiple TVs within a home.

Cable has long used the multi-room issue to its competitive advantage in its anti-DBS advertisements.

But as DBS hardware prices continue to drop and rental options become more widely available, the satellite industry is trying to counter those negative perceptions.

DirecTV wants to sign more multi-room customers not just because doing so breaks down a barrier to entry for some, but because subscribers who activate multiple boxes tend to be more loyal, stick around longer and purchase additional services, said senior vice president of marketing Susan Collins.

"They're more engaged with the product and have a tendency to watch more pay-per-view and sports," Collins explained. Husbands feel less guilty subscribing to seasonal sports packages if they know their wives and children can watch their own favorite DirecTV channels at game time, she said.

DirecTV plays up the emotional connection in new "Feel the Joy" TV spots that launched March 24, which tag the multi-room offer.

In a promotion that runs through April 20, DirecTV offers a $50 programming credit to new subscribers who activate two or more DirecTV receivers and commit to its Total Choice package for a year. The credit is available whether the customer purchases the hardware or rents it from DirecTV.

National retailers have also backed the campaign. A promotion that Circuit City Stores Inc. staged last week, for instance, offered a two-room satellite system for free.

Although DirecTV has never before run a multi-room campaign at the national level, it has conducted local and regional efforts in the past year, to much success, Collins said.

DISH IN THE ACT

EchoStar has separate promotions targeted to consumers with two televisions and those that want DBS on up to four sets. With each offer, new customers get three months free programming.

The two-TV promotion is available for consumers who purchase the hardware. Those who want Dish Network programming on additional TVs are encouraged to sign up for the company's rental option, called the Digital Home Plan.

In its "1, 2, 3 Free!" promotion, EchoStar offers a two-receiver system for $149, including installation, to new subscribers who commit to an annual programming package. Under the Digital Home Plan, new customers pay a one-time $49.99 activation fee to have a dish and up to four receivers installed.

Under the Digital Home Plan, monthly programming costs are progressively higher for each receiver activated.

DBS companies typically charge a monthly "mirror" fee of about $5 for each additional active receiver on an account.

Digital cable customers also generally pay extra for each additional digital box in the home, typically in the form of an equipment rental fee.

At a Cable & Telecommunications Association for Marketing teleseminar last month, Cox Communications vice president of marketing Joe Rooney said cable still offers a multi-room advantage even to digital subscribers. That's because customers can choose to pay for digital in one room, and have analog delivered to all the other sets at no extra charge.

Rooney added that as MSOs upgrade their digital cable offerings to include video-on-demand, high-definition television and other services, there's a good opportunity to win back customers who migrated to DBS for the expanded channel offerings but still subscribe to cable for local channels or multi-room options.

BLAKE: CARPE DIEM

Also at the teleseminar, CTAM marketing advisor Mary Pat Blake encouraged cable executives to take advantage of the distraction that faces DBS companies because of the proposed merger between EchoStar and DirecTV parent Hughes Electronics Corp.

But Collins suggested cable ops shouldn't get too comfortable.

"We are laser-focused on what we have to do to drive subscribers and revenue," she said. In DirecTV's marketing and sales departments, Collins added, "we're not focused on the merger at all. The [first-quarter sales] numbers will prove we're not distracted."

DirecTV also appears to have no hesitancy in driving multiple receivers into homes, even if those receivers may ultimately have to be swapped following the EchoStar merger.

Until the merger is completed, Collins said, "We operate as two separate companies."