Spending For Subs

Cable World, July 21, 2003

Byline: BRIAN SANTO, KAGAN

DirecTV has always spent lavishly to gain subscribers. With cable operators stepping up efforts to lock in customers for the long term with bundles, DirecTV spent $89 mil. in Q2 on ads in which the company exhorted customers to upgrade to multiple boxes and DVRs. Customers with multiple boxes and/or DVRs tend to spend more and churn less, according to DirecTV. Improvements in churn and ARPU have been nominal so far, but the real value may be in retaining its best customers. DirecTV warned subscriber acquisition costs are likely to go higher as customers start upgrading to multiple boxes.

DIRECTV SUBSCRIBER ACQUISITION COSTS RISE