Direct-broadcast satellite companies DirecTV Inc. and EchoStar Communications Corp. plan to turn up the heat in their fight for market share against beleaguered Adelphia Communications Corp., which filed for Chapter 11 bankruptcy protection last week.
DirecTV today (July 1) is expected to unleash a print and radio media blitz in the Los Angeles market, offering cable subscribers the opportunity to get satellite television installed in two rooms for $50 or less. To back the offer, the DBS company has enlisted a number of local installers and retailers, including consumer electronics stores Best Buy Co., Good Guys! Inc. and Circuit City Stores Inc., DirecTV executive vice president of marketing, advertising and product development Larry Chapman said.
"We believe the [bankruptcy] issue has just started to receive consumer attention," Chapman said in speaking about the timing of the campaign. "It's hit the consumer press" after being relegated to the financial trades for weeks.
"We wanted to time the offer to occur with maximum exposure," Chapman added. "I think our timing is right. If you come in too early, people don't understand what the issue is."
DirecTV plans to word the ads carefully so that they don't appear too negative, relying instead on the mainstream press to play up any uncertainty about the cable company's future.
"Consumers will be concerned that even if Adelphia continues as an operating company, its ability to enhance its services will be limited in almost any situation," Chapman said. DirecTV's message to Adelphia subscribers will be that DBS provides a reliable
alternative to cable that's all digital and immediately available, Chapman added.
Los Angeles has been a good market for DirecTV, Chapman said, in part because it's such a fragmented cable market. The company plans to extend the offer quickly to other Adelphia areas, once it fine-tunes the messaging in its ads.
EchoStar spokesman Marc Lumpkin said last week that the company continues to run Dish Network ads targeting Adelphia subscribers. The ads don't make specific reference to Adelphia's financial troubles, but rather highlight any recent rate increases the MSO introduced in its local markets, Lumpkin added.
Adelphia subscribers are not exceedingly vulnerable to churn, suggested B.G. Marketing Inc. president Barbara Roehrig.
"I don't think the consumer is as apprised as we are in the industry," Roehrig said, adding, "There probably will be a spike in churn just because it's low-hanging fruit for DirecTV and EchoStar."