DIRECTV

DirecTV
Public
Traded as NASDAQ: DTV
NASDAQ-100 Component
S&P 500 Component
Industry Satellite television
Founded December 20, 1985
(as Hughes Electronics Corporation)
1990 (as DirecTV)[1]
Headquarters 2230 E. Imperial Highway
El Segundo, California, US
Area served
 United States, Latin America, and the Caribbean
Key people
 Michael White
(Chairman, President and CEO)[2]
Products Direct broadcast satellite, Pay television, Pay-per-view
Revenue
  • Increase US$ 31.754 billion (2013)[3]
  • Increase US$ 29.74 billion (2012)[3]
  • Increase US$ 5.15 billion (2013)[3]
  • Increase US$ 5.085 billion (2012)[3]
  • Decrease US$ 2.859 billion (2013)[3]
  • Increase US$ 2.949 billion (2012)[3]
Total assets
  • Increase US$ 21.905 billion (2013)[4]
  • Increase US$ 20.555 billion (2012)[3]
Total equity
  • US$ −6.544 billion (2013)[4]
Number of employees
 27,200 (2013)[2]
Subsidiaries DirecTV U.S.
DirecTV Latin America
DirecTV Sports Networks
Game Show Network (42%)
Website www.directv.com
A standard DirecTV satellite dish with Dual LNB on a roof

DirecTV (stylized as DIRECTV) is an American direct broadcast satellite service provider and broadcaster based in El Segundo, California. Its satellite service, launched on June 17, 1994, transmits digital satellite television and audio to households in the United States, Latin America and the Caribbean.[5][6] Its primary competitors are Dish Network and cable television providers. It was announced on May 18, 2014, that DirecTV may possibly be acquired by AT&T, Inc., in a transaction valued at $48.5 billion that is subject to federal approval.[7]

General information

DirecTV provides television and audio services to subscribers through satellite transmissions. Services include the equivalent of many local television stations, broadcast television networks, subscription television services, satellite radio services, and private video services. Subscribers have access to hundreds of channels, so its competitors are cable television service and other satellite-based services.[8]

Most subscribers use reception antennas which are much smaller than the first generation antennas, which were typically a few yards (meters) across. Advances in antenna technology, including fractal antennas, have allowed a general reduction in antenna size across all industries and applications. Receiving equipment includes a satellite dish, an integrated receiver/decoder and a DirecTV access card, which is necessary to operate the receiver/decoder.[9]

Consumers who purchase DirecTV subscribe to various packages of DirecTV programming for which the subscriber pays a monthly fee. Additional monthly fees may include a protection plan (which provides for repair or replacement of consumer-leased equipment from damages caused by lightning, power surges, floods, etc.), DVR, additional receivers, HD channels, and other premium channel packages. A subscriber also can order pay-per-view and video on demand events and movies. DirecTV contracts with and pays program providers such as cable networks, motion picture distributors, sports leagues, event promoters, and other programming rights holders, for the right to distribute their programming to its subscribers. All programming distributed by DirecTV is delivered to its broadcast centers in Castle Rock, Colorado, and Los Angeles, where it is then digitized and compressed. The resulting signal is encrypted by DirecTV to prevent its unauthorized reception. DirecTV then transmits these signals to several satellites located in geostationary orbit.[9]

As of the quarter (Q3) ended September 30, 2012, DirecTV U.S. had 19.981 million subscribers and revenues for the quarter of US$5.769 billion. For the same period, DirecTV Latin America ended with 9.666 million subscribers and revenues of US$1.577 billion.[10]

In addition to serving residences, DirecTV offers service to bars, restaurants, hotels, dorms, and hospitals through their DirecTV for business service. The company also offered mobile service for cars, boats, and RVs (DirecTV Mobile) as well as aircraft (DirecTV Airborne) in cooperation with Connexion by Boeing.

History

Origins

Hughes Electronics logo (1985-1990)

In 1953, Howard Hughes created the Howard Hughes Medical Institute (HHMI), to which he transferred full ownership of Hughes Aircraft. Ostensibly created as a non-profit medical research foundation, HHMI was accused of being used by Hughes as a tax shelter. Following Hughes' death in 1976, HHMI was incorporated in 1977, and litigation ensued to determine whether it would be allowed to maintain its interest in Hughes Aircraft. In 1984, the court appointed a new board for HHMI, which proceeded to sell off Hughes Aircraft to General Motors on December 20, 1985, for an estimated $5.2 billion. General Motors then merged Hughes Aircraft with its subsidiary Delco Electronics to create Hughes Electronics Corporation. The new subsidiary was initially composed of four units: Delco Electronics Company, Hughes Aircraft Company, Hughes Space and Communications Company, and Hughes Network Systems.

Stanley E. Hubbard founded United States Satellite Broadcasting (USSB) in 1981 and was a leading proponent for the development of direct-broadcast satellite service in the United States. USSB was awarded five frequencies by the FCC, at the coveted 101 degree west satellite location. Hughes Communications, Inc. was also awarded 27 frequencies at the same 101-degree location. After many years, the technology was developed to enable the building of very high-power satellites, and digital compression (MPEG-2) standards were developed that allowed multiple digital television channels to be sent through each satellite frequency.

After Hughes failed to complete a joint venture with NBC, News Corp., and Cablevision, in 1990, to launch the first high-power digital television service called Sky Cable,[11] the company created DirecTV as a separate division and secured an agreement with USSB to build and launch the first high-power direct-broadcast satellite system. DirecTV's name is a portmanteau of "direct" and "TV" (as in direct broadcast satellite television). Hughes/DirecTV then turned to Thomson Consumer Electronics (under the RCA, GE, and ProScan brands) to develop the digital satellite system for the service that would be capable of receiving 175 channels on a small 18-inch dish. These dishes utilized a new generation of smaller, lighter receiver dishes based on military technology introduced by the Global Broadcast System, which predated DirecTV's viability by almost ten years. Hughes was awarded the contract to build and launch the new high-powered satellites, and USSB and DirecTV agreed that the new satellites would carry the two separate programming services: USSB and DirecTV.

On June 17, 1994, the USSB and DirecTV programming services were launched. Digital Equipment Corporation provided the hardware for DirecTV, Matrixx Marketing (part of Cincinnati Bell) provided customer care via the Matrixx Plus department, and DBS Systems created the billing software. In December 1998, DirecTV acquired USSB for $1.3 billion, and combined the two satellite services.[12] In 1999, DirecTV acquired PrimeStar, a competitor in the satellite television industry, for $1.83 billion, dramatically increasing its share of the satellite television market in the US.[13]

In September 1996, Hughes purchased 70% of PanAmSat for $3 billion.[14] In 1997, GM spun off Delco Electronics from Hughes and transferred it to Delphi Automotive Systems.[15] That same year, Hughes Aircraft was sold to Raytheon for $9.5 billion.[16] Raytheon filed a lawsuit in 1999 accusing Hughes of overstating the value of Hughes Aircraft by $1 billion.[17] A $635.5-million settlement was reached in 2001.[18] In 2000, Hughes Space and Communications was sold to Boeing for $3.75 billion,[19] which it later claimed had also been overvalued by Hughes. Hughes later settled with Boeing for $360 million.[20] These sales left DirecTV, PanAmSat and Hughes Network Systems as the remaining components of Hughes Electronics.

In September 2000, GM executives, under pressure from GM's shareholders as a result of its poor performance and the substantially greater market worth of Hughes, authorized Hughes executives to begin seeking buyers.[21] In 2001, News Corporation began negotiations to acquire Hughes Electronics in a deal worth $8 billion, which would allow News Corp. to expand its Sky Global Networks satellite television operations into the United States.[22] Negotiations with News Corp. ultimately failed, and Hughes entered into an agreement on October 28, 2001 to be purchased for $26 billion by EchoStar, owner of Dish Network.[23] However, the deal attracted significant opposition from the Department of Justice and the Federal Communications Commission due to antitrust concerns, leading the two companies to withdraw the agreement in December 2002.[24] As part of the merger agreement, EchoStar was required to pay Hughes $600 million due to the failure of the merger.[24]

On April 9, 2003, News Corporation agreed to purchase a 34% controlling interest in Hughes, including GM's entire share of the company, for $6.6 billion, subject to SEC approval.[25] As part of the financing for the deal, Liberty Media agreed to take a $500-million option of stock in News Corporation that would be exercised upon the closing of the deal. Liberty, the second-largest shareholder in News Corp. after the Murdoch family with 18%, had originally planned to bid for DirecTV, but opted not to upon the agreement.[25] The SEC voted 3-2 along party lines on December 19, 2003 to approve the deal subject to conditions, forcing News Corp. to agree to arbitration for all disputes with carriers of its media broadcasters, and to provide content through DirecTV neutrally rather than favoring its own networks.[26]

Year Subscribers
1994 320,000
1995 1,200,000
1996 2,300,000
1997 3,301,000
1998 4,458,000
1999 6,679,000
2000 9,554,000
2001 10,218,000
2002 11,181,000
2003 12,290,000
2004 13,000,000
2005 15,000,000
2006 15,950,000
2007 16,830,000
2008 17,620,000
2009 18,081,000
2010 19,200,000
2012 19,900,000
2014 20,265,000

Becoming a standalone entity

In February 2004, Hughes announced its intent to focus solely on its satellite television operations and divest its other interests, renaming itself The DirecTV Group, Inc. on March 16, 2004 and changing its ticker symbol from "HS" to "DTV".[27] In April of that year, it sold its controlling interest in PanAmSat to a private consortium led by Kohlberg Kravis Roberts for $3.53 billion.[28] On April 22, 2005, DirecTV spun off Hughes Network Systems into a separate entity and sold 50% of the new entity to SkyTerra, acquiring $157.4 million in the transaction.[29] In January 2006, DirecTV sold its remaining 50% share in Hughes Network Systems to SkyTerra for $100 million.[30] The sale effectively ended DirecTV's 20-year existence through Hughes Electronics as a technology conglomerate, leaving it solely with its satellite television services.

In 2004, DirecTV abandoned the Mexican market, though it maintained 41% ownership of SKY México.[31] On November 15, 2005, DirecTV stopped carrying Music Choice audio-only channels, replacing it with 73 channels of XM Satellite Radio. In 2007, DirecTV abandoned the Brazilian market, with the customers being migrated to the 74% DirecTV-owned Brazilian affiliate of SKY Brasil.[31] In 2010, DirecTV increased its stake in Sky Brasil to 93%.

Expansion

On January 9, 2007, DirecTV announced they would introduce up to 100 national HD channels during 2007, all of which would be MPEG-4 encoded.[32] On October 15, 2007, DirecTV announced that they had 70 national high-definition channels available, with up to 100 coming by year end. On October 3, 2008, DirecTV announced that it would offer HD local channels in 121 markets by year end.[33]

In December 2006, News Corporation announced its intention to transfer its 38.5% controlling interest in The DirecTV Group, four regional Fox Sports Net stations and $550 million cash to Liberty Media in exchange for Liberty's 19% interest in News Corp., giving the Murdoch family tighter control of the latter firm.[34] The deal, valued at $11 billion, was approved by News Corp. shareholders in April 2007.[35] Following revisions that increased the cash offer to $625 million in exchange for a reduction of Liberty's divested interest in News Corp. to 16%, the swap was completed on February 27, 2008 following U.S. Federal Communications Commission (FCC) approval.[36] One condition placed by the FCC on the deal was that Liberty divest either its DirecTV operations or Liberty Global's cable operations in Puerto Rico, which Liberty fulfilled by placing DirecTV's Puerto Rican operations in a trust.[37]

On May 4, 2009, Liberty announced that it would split off Liberty Entertainment, Inc., a subsidiary of Liberty owning the four FSN channels acquired under the swap with News Corp. and Liberty's 65% interest in Game Show Network, into a separate company to be merged with The DirecTV Group, reducing Liberty owner John Malone's stake in DirecTV to 24%.[38] The merger was completed on November 19, 2009, with The DirecTV Group and Liberty Entertainment becoming subsidiaries of a new company named DirecTV.[39] On June 16, 2010, Malone exchanged his preferred stock in DirecTV with equivalent amounts of common stock, reducing his voting interest in the company from 24% to 3%, with Malone resigning as Chairman and ending his managerial role at DirecTV.[40]

On Feb 9, 2010, DirecTV dropped Sirius XM Radio and replaced the channel lineup with Sonic Tap audio stations.[41] On April 1, 2011, DirecTV announced it would be renaming its three FSN channels as Root Sports, though the channels are still affiliated with FSN.[42]

Acquisitions

Pending acquisition by AT&T

On May 18, 2014, following earlier reports that they were negotiating an offer, AT&T announced that it will purchase DirecTV.[45][46] In the deal, which has been approved by boards of both companies, DirecTV stockholders will receive $95 a share in cash and stock, valuing the deal at $48.5 billion. Including assumed debt, the total purchase price is about $67.1 billion. The deal is aimed at increasing AT&T's market share in the pay-TV sector; its existing U-Verse brand has modest market share (5.7 million users compared to DirecTV's 20 million US customers as of 2014) and operates in only 22 states. It will also give AT&T access to fast-growing Latin American markets, where DirecTV has 18 million subscribers.

The deal will face regulatory approval by the FCC, the U.S. Department of Justice, and some Latin American governments. It is expected to take about 12 months to complete.[47] It is contingent on the combined company's ability to renew its exclusive rights to carry the NFL Sunday Ticket service beyond the 2015 NFL season on "substantially the terms discussed between the parties."[48]

Receivers

In the past, receivers were manufactured by DirecTV and other companies, including Samsung Electronics, Philips, Sony Electronics, Panasonic, Mitsubishi Electronics, and Toshiba. Other companies' DirecTV receivers have been phased out and DirecTV now designs their own models with companies such as Pace Micro Technology of Britain, LG of South Korea (which had manufactured boxes under the LG and Zenith Electronics names), and Thomson of France (which had previously manufactured boxes under the RCA name, GE (under license), and the ProScan brand). DirecTV and TiVo announced on September 3, 2008, that they will work together to develop a version of the TiVo service for DirecTV's broadband-enabled HD DVR platform.[49] Originally scheduled to launch in the second half of 2009, it was expected to be available in spring 2010 but delayed again.[50] It was finally released on December 6, 2011.[51] The new unit, model THR22, is now available in select markets.[52][53] The THR22 DVR does not have all the features of the HR24 DVRs.[54]

DirecTV typically uses a fixed 18-inch-diameter (460 mm) dish antenna to receive its signals. Traditionally an 18×24-inch elliptical was used; however, most new installations use an 18×20-inch antenna to receive signals from three geostationary satellite positions simultaneously. These systems are becoming more common as DirecTV attempts to squeeze more programming onto its growing systems. DTV is now installing a dish that has five LNBs for HDTV programming and local channels in selected markets. These systems receive signals from up to five separate satellites in both the Ku band and Ka band. After the new satellite, DirecTV 11, is fully operational, DirecTV will stop supplying dual, triple, and five-LNB dishes to all customers and move to supplying a three-LNB Ka/Ku dish known as the Slimline3. This dish will see orbital locations 99, 101, and 103 degrees West. The Slimline3 will be the new standard install dish (for HD and SD programming), while the five-LNB Slimline will be used for installs in areas that receive local or international programming from orbital locations 110 or 119. The Slimline3 looks nearly identical to its predecessor, aside from a smaller LNB.

The new DirecTV HD channels require an H20/HR20 or H21/HR21/HR22/HR23/H24/HR24 set top box (STB). In order to receive the new HD channels (channels added after September 2007), all HD receivers except the HR23 must have a B-Band converter installed. If the converter is not installed, viewers can only receive older HD channels (channels 70–99). The B-Band Converter (BBC) is also not required with the new Single Wire Multiswitch (SWM or SWiM) system, which preselects the satellite and transponder tuning and can feed up to 8 tuners via a single coaxial cable. The "HR" moniker designates the receiver as a HD digital video recorder (DVR) model.

Only the H20/HR20 support direct reception of over-the-air ATSC broadcasts. The H21/HR21/HR22/HR23/H24/HR24 receivers do not have a built in ATSC tuner, but the AM21 external tuner is available. In addition, there is HDMI support for HDTVs with an HDMI port. New STBs also support MPEG-4 standard for HD *Programming. DirecTV also offers the AM21 (an ATSC add-on for the HR21), the HR21-Pro (an HD-DVR with 100 hours HD or 400 hours SD recording capacity), and an online DVR scheduler.

Access card history

DirecTV transmits programming with encryption to mitigate signal piracy. The receiver (also known as an IRD, or "integrated receiver-decoder") utilizes ISO/IEC 7816 smart cards which tell the receiver how to decrypt the programming for viewing. In a continuing effort to combat piracy, an access card generation is created approximately every two years, superseding the old set. DirecTV is now utilizing a fifth generation of access cards.

DirecTV has battled with an active signal piracy underground for many years. One infamous event that temporarily hampered pirates was known as 'Black Sunday', which took place one week before Super Bowl Sunday in 2001. Hackers saw a string of software updates starting in late 2000 that seemed harmless, but included code that once complete searched for and destroyed 98% of hacked smart cards. Hacks continued after that event.[56][57][58]

High-definition television (HDTV)

DirecTV AU9-S 3-LNB "Slimline" satellite dish
DirecTV AT-9 5-LNB "Sidecar" satellite dish

Like its competitors, DirecTV offers high-definition television (HDTV) and interactive services.

To handle the proliferation of bandwidth-intensive HDTV broadcasting, DirecTV rebroadcasts local HDTV stations using the H.264/MPEG-4 AVC codec while employing a newer transmission protocol (DVB-S2) over the newer satellites. This allows DirecTV to squeeze much more HD programming over its satellite signal than was previously feasible using the older MPEG-2 compression and DSS protocol it has been using. This technology will be gradually expanded to the existing satellites as customer equipment is replaced with new MPEG-4-capable receivers.

Receiving the channels encoded in MPEG-4 requires newer receivers, such as the H20 as well as the 5-LNB Ka/Ku dish. DirecTV has contracted with Britain's Pace Micro Technology, Korea's LG Electronics and France's Thomson to manufacture these new receivers. Pace manufactures the DirecTV Plus HD DVR (Model HR20-700, and HR21-700) and LG Electronics offers the Model H20-600 receiver, while Thomson provides the Model H20-100 and HR20-100 DVR receivers. DirecTV has admitted to software issues with some of the H20 receivers and HR20 DVRs, which have been plagued with random problems since they were released in mid-2006. DirecTV regularly released software updates for the HR20 receivers, in an effort to reduce issues to an acceptable level.

DirecTV has phased out its original TiVo-branded HD DVR, the HR10-250, which can only decode the older MPEG-2 signals. All DirecTV-delivered local HDTV stations (outside of the NYC and LA network stations) are encoded in MPEG-4. The HR10-250 cannot receive the MPEG-4 local HDTV stations in these markets but can still receive over-the-air ATSC broadcasts in these markets. After a multi-year hiatus, TiVo and DirecTV are developing a new TiVo enabled HD DVR that will be able to receive/decode DirecTV's current MPEG-4 satellite signals. Originally slated for release in the second half of 2009, it is now available in select markets.[52][53]

Ultra-high-definition television (UHDTV)

On November 13, 2014, DirecTV announced that, beginning November 14, 2014, it would become the first multi-channel video provider to offer 4K Ultra HD (UHD) programming direct to customers' televisions. The 4K UHD service, at launch, would be strictly video on demand with a lineup of nearly 20 movies. It also requires that customers have an Internet-connected Genie HD DVR (HR34 and above) and a Samsung UHD TV that is explicitly DIRECTV 4K Ready.[59]

Local channels

DirecTV also offers local channels like CBS, ABC, NBC, Fox, PBS, The CW, Telemundo, Azteca, Univision, ION Television (in markets that carry that network), and some independent stations in markets covering over 99.2% of U.S. TV households.[60] In markets that lack an OTA CW affiliate, DirecTV includes WDCW from Washington, D.C. or XETV from San Diego.

Subscribers located where they cannot receive a decent terrestrial television signal and/or live in a tiny market that only has a couple of stations can receive feeds from New York and Los Angeles for CBS, ABC, NBC, and Fox, as well as a feed from the Washington, D.C. CW affiliate, though a waiver from the local affiliate stations may be required to allow this, approved at their discretion. National PBS and ION channels are also available.

In the largest markets, local channels are carried on the satellite at 101°W. In some smaller markets, the local channels are carried on a second satellite located at 119°W which requires a slightly larger dish with two or three LNBs or the newer Ka/Ku 5-LNB dish. In a few smaller markets, local stations are located on a satellite at 72.5°W that requires a second dish to be installed.

In late 2005, DirecTV began providing local HDTV channels to the largest markets, requiring newer receivers with a larger dish capable of receiving signals from up to five satellites at once. The Ku-band signals on the newer Ka/Ku dish are received from 101°W, 110°W, and 119°W, while Ka-band signals are from 99°W and 103°W.

Local television channels are transmitted over optical fiber links, Ku-band satellite uplink, microwave, and conventional terrestrial transmission to uplink centers located throughout the United States. DirecTV can provide true HD into hotels (Pro:Idiom). Cable companies have been able to provide true HD to hotels for over 2 years now with the installation of private video networks (FTTP to Coax conversion & Pro:Idiom) or with HFC HD video distribution systems (Pro:Idiom).

JetBlue promotes DirecTV on board Airbus A320 N510JB "Out of the Blue"
DirecTV on board a jetBlue plane.


Programming

DirecTV owns regional sports networks Root Sports Pittsburgh, Root Sports Northwest, Root Sports Southwest, Root Sports Rocky Mountain, and Root Sports Utah (all under the umbrella of DirecTV Sports Networks). DirecTV also owns minority shares of Game Show Network and MLB Network.

DirecTV has its own exclusive general entertainment channel called Audience Network, and an exclusive 3DTV channel called n3D. DirecTV is also the exclusive U.S. rights holder to sports package NFL Sunday Ticket. DirecTV also exclusively carries the "DirecTV Experience", which includes bonus coverage of Men's Majors Golf Tournaments and Grand Slam Tennis Tournaments, including live feeds not available on other networks such as CBS, NBC, ESPN, Golf Channel and Tennis Channel, that cover the events. DirecTV was also the exclusive provider of defunct sports packages NASCAR Hot Pass and Mega March Madness.

Original series

In 2014, DirecTV picked up 10 episodes of original comedy for an upcoming television series Things You Shouldn't Say Past Midnight based on Peter Ackerman's play of the same name.[61] It is the first original television series to be produced by DirecTV.[61]

Marketing

Beginning in 2006, DirecTV began a series of commercials in which characters from popular movies and television shows break the fourth wall to tout the service's picture quality and the number of channels available in high definition. Instead of using CGI the original actors normally reprise their roles on recreated sets, and resulting footage is mixed with the original scenes. The productions must be recent, due to the use of original actors, and appeal to DirecTV's "male-oriented marketing message."[62] These characters include Captain Kirk (William Shatner, Star Trek VI: The Undiscovered Country), Bill Harding (Bill Paxton, Twister), The Economics Teacher (Ben Stein, Ferris Bueller's Day Off), Dr. Emmett Brown (Christopher Lloyd, Back to the Future), Burton Guster (Dulé Hill, Psych), C.J. Parker (Pamela Anderson, Baywatch), Rick "Wild Thing" Vaughn (Charlie Sheen, Major League), Beyoncé (Upgrade U music video), Nadia (Shannon Elizabeth, American Pie), Turtle (Jerry Ferrara, Entourage), Ellen Ripley (Sigourney Weaver, Aliens), Steve Freeling (Craig T. Nelson, Poltergeist), Annie Wilkes (Kathy Bates, Misery), Mini-Me (Verne Troyer, Austin Powers In Goldmember), The Girl in the Ferrari (Christie Brinkley, National Lampoon's Vacation), Daisy Duke (Jessica Simpson, The Dukes of Hazzard), T-1000 (Robert Patrick, Terminator 2: Judgment Day), Ann Darrow (Naomi Watts, King Kong), Hellboy (Ron Perlman, Hellboy), Richard Hayden (David Spade, Tommy Boy), The Black Eyed Peas (Meet Me Halfway music video), Christina Aguilera (Keeps Gettin' Better music video) and Honey Hornee (Kim Basinger, Wayne's World 2). Also in this series of commercials were Peyton Manning, Eli Manning, and Archie Manning promoting NFL Sunday Ticket, and Dale Earnhardt, Jr. promoting NASCAR Hot Pass. Cartoon characters have also been used in the ads, beginning with Scooby-Doo and the Mystery, Inc. gang. Recent commercials have also featured model Hannah Davis in a non-speaking role.

DirecTV during that time also ran series of ads that takes shots at cable television's service (or lack of service). Beginning in March 2010, they did a spoof of the classic game show To Tell The Truth with Alex Trebek hosting the show. The series of commercials both pays homage to the Goodson-Todman game show, and take shots at both cable and DirecTV's arch rival Dish Network, who later sued for false advertising. Dish says DirecTV's ads claim a misleading number of HD channels at a price that does not include any HD. Dish also says DirecTV misleads consumers by saying it can offer 200 HD channels when it really offers about 130. Dish says the ads end with the promotional price of $29.99 a month, which it says does not include HD. Another series of commercials, promoting the 2010 NFL Sunday Ticket package of all-football programming, featured neighbors committing uncivil acts to neighbors who watched the "wrong" football team. One spot had a woman leaving a snack platter for a neighbor on which the food spelled out "DIRT BAG"; another showed a dog trashing a neighbor's property; yet another showed an on-duty policeman knocking on a DirecTV customer's door, stunning him with a taser and leaving him passed out in his open doorway. In August 2011, Deion Sanders began appearing in DirecTV's ads for NFL Sunday Ticket, urging people to switch from cable. These ads originally claimed NFL Sunday Ticket is now "free" for new customers for one year with a subscription to their Premiere package and a two-year contract. In response, on August 4, 2011, Comcast sued DirecTV for false advertising.[63] Comcast dropped the case on August 19, 2011 after DirecTV altered the ads to remove the word "free", changing it to "at no extra charge".[64]

DIRECTV blimp

DirecTV Blimp flying over West Las Vegas during the Consumer Electronics Show 2015.

The DirecTV blimp was launched in October 2007 at the MLB World Series in Boston and has been seen all over the United States since its inception. The blimp flies mainly over live sporting events but has also been seen at other entertainment and charitable venues. This second generation A-170LS Video Lightsign Lightship features the state of the art video screen that displays full color video images day or night. This lightsign, the only one of its kind in the world, is used to display messaging and advertising for DirecTV. The blimp has been recently spotted on Twitter as followers track the journeys of the blimp from one event to another. The airship is owned and operated by The Lightship Group, an advertising company based in Orlando, FL.[65]

Customer service

DirecTV service van, Ypsilanti Township, Michigan. DirecTV equipment is installed and maintained by private contractors such as Multiband as shown here.

DirecTV was awarded a J.D. Power award for residential cable and satellite TV customer satisfaction in 2007.[66]

DirecTV's customer service is provided by many third-party owned call centers both inside and outside the United States. Most of the call centers are contracted to provide agents to answer customer phone calls regarding programming, billing, or technical questions.

As of November 2012, DirecTV does not offer a 30-day grace period for those who wish to try the service. "If you do not fulfill your Programming Agreements, DirecTV may charge a pro-rated fee of up to $480."[67]

Better Business Bureau review

In August 2008, The Boston Globe reported that DirecTV received 20,000 complaints in less than three years to the Better Business Bureau on DirecTV slipping in cancellation fees.[68]

In August 2010, the BBB reported that it had received 39,000 complaints against DirecTV in the previous 3 years, and the BBB gave it an F (failing) grade. Many of the complaints concerned DirecTV's early termination fees, billing and service issues.[69]

As of June 2013, the Better Business Bureau has no rating for DirecTV,[70] though this may be related to problems internal to the BBB.[71]

Consumer protection lawsuits and violations

Washington State's Attorney General civil complaint

On December 14, 2009 the Washington Attorney General's office filed a civil complaint against DirecTV seeking injunctive and other relief. The complaint was filed in the public interest when the Attorney General's office determined after a one-year investigation by its Consumer Protection Division, that the company allegedly engaged in numerous repeated violations of the state’s Consumer Protection Act.

The complaint alleged unfair or deceptive practices which include, but are not limited to

The Attorney General’s Office asked the court to compel DirecTV to change its business practices, impose civil penalties and provide restitution for consumers.

The case was settled in December 2010, with Directv agreeing to pay over one million dollars, and to correct many of its business practices.[72] 47 other states joined in a similar suit, the settlement of which required Directv to pay over 13 million dollars.[73]

California class action lawsuit

In September 2008, consumers filed a class action lawsuit with the Los Angeles Superior Court to stop DirecTV's practice of charging early cancellation penalties to subscribers. The lawsuit claims that DirecTV fails to disclose the penalty to new customers or to existing customers who replace their equipment or add a new receiver, and that these practices are unlawful. In September 2009, a motion for a preliminary injunction was filed to block the company from automatically removing the fees from customers’ bank accounts or charging their credit card accounts without their prior knowledge and written consent until the lawsuit is resolved.[74]

Telemarketing violations

In December 2005 the U.S. Federal Trade Commission imposed a $5.3 million penalty on DirecTV for its violations of federal telemarketing regulations. It was the largest civil penalty the FTC had ever announced in a case enforcing any consumer protection law.[75]

Deceptive advertising

On March 11, 2015, the U.S. Federal Trade Commission filed a lawsuit against DirecTV for deceptive advertising. The FTC claims that DirecTV failed to properly disclose important terms of its TV packages. The complaint says DirecTV typically advertised 12-month deals without noting that a two-year contract is required, that package prices rise substantially during the second year, and that early cancellation fees may be imposed. It also says DirecTV failed to mention that offers of free premium channels, like HBO, would result in charges if the channels were not cancelled before the free period ended.[76]

See also

References

  1. ↑ "About Us: Company Profile". DirecTV. Retrieved July 8, 2013.
  2. ↑ 2.0 2.1 "2011 Form 10-K, DirecTV". United States Securities and Exchange Commission.
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 "DIRECTV 2013 Annual Report Form (10-K)" (XBRL). United States Securities and Exchange Commission. February 24, 2014.
  4. ↑ 4.0 4.1 "DIRECTV 2014 Q1 Quarterly Report Form (10-Q)" (XBRL). United States Securities and Exchange Commission. May 12, 2014.
  5. ↑ DTV Group (June 26, 2010). "DirecTV Caribbean". DirecTV. Retrieved June 26, 2010.
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