It’s no secret that customers are becoming more and more fed up with rising cable and satellite bills. Customers fall for promo deals that make pay TV service seem affordable, only to be slammed with rates that can double or even triple in the second half of the contract.
It’s a scheme that has kept the Pay TV industry profitable, and it despite the growing popularity of the cord cutting movement, it doesn’t seem like it’s going anywhere any time soon.
During the November 9, 2015 quarterly earnings call, Dish Network CEO Charlie Ergen stated that he’d rather have “13 million profitable customers” than the same number of profitable customers with another million “unprofitable customers.”
Who are these unprofitable customers he’s speaking of? It’s those calling for discounts, trying to lower their bill. Ergen went as far as stating that even if they get the discounts they want, they’ll call back and ask for more. These are what he refers to as “unprofitable customers.”
While it’s understandable that Dish is a business that needs to stay profitable to keep investors happy, this statement exemplifies the growing rift between consumers and cable/satellite companies. It sounds as if, rather than attempting to bring prices down, they’d rather just not service the customer altogether.
To be fair, Ergen also stated that pay TV simply isn’t profitable at the $19.99 price point. Furthermore, he basically said it’s dishonest to sell packages at that price point because by the time the customer pays all the “hidden fees,” that’s another $30 or so on on top of their bill.
So are the cable/satellite companies really the big bad evil they’re being painted as? Or is it a situation where they’re simply trying to keep their heads above water and remain profitable?
Which brings up this question: will the “profitable” customers keep coming back, or will they eventually get fed up and cut the cord? And does Dish see Sling TV as a way to still make money off the “unprofitable” customers?
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