EchoStar Reveals New Subscriber Churn Program

LITTLETON, COLO.— EchoStar this month began a new retail program aimed at controlling subscriber churn.

EchoStar CEO Charlie Ergen told analysts in a recent quarterly conference call that the initiative is patterned on a program launched this summer by rival Pegasus. It involves classifying retail partners using color-coded categories based on churn numbers.

Dealers with an annualized customer loss of more than 60 percent are designated as "red" and will be required to pay an additional $100 on top of wholesale pricing for each system purchase.

Retailers with an annualized churn of between 48-60 percent will pay $50 over the system wholesale cost, and dealers marked as "yellow" have a churn rate of 36-47 percent and will be encouraged to reduce churn but will not be required to pay an additional charge for hardware.

Those designated as "white" dealers are those considered to be good performers.

EchoStar, which did not disclose its churn numbers, said 2 percent of its dealers account for 10 percent of the company's annualized churn rate. The churn numbers were said to have increased during the nine months ended Sept. 30, from the same period last year. The subscriber losses were attributed to the slowing economy, bounty programs offered by competitors, a maturing subscriber base and piracy primarily using competitors' products.

Meanwhile, EchoStar said it is offering current subscribers the chance to purchase its DishPVR 501 combination IRD/personal video recorder for $199. Customers who opt for the purchase must commit to a year of America's Top 150 basic programming at $39.99 per month or greater and sign up for the Credit Card Autopay program where their monthly bill is applied to the customer's credit card.

The DishPVR 150 has a built-in hard drive that will store up to 35 hours of television programming at a time. EchoStar does not charge an additional fee for the PVR capability.

Without releasing numbers, Ergen said EchoStar is the leading PVR supplier. The company said it will release PVR customer totals when it reaches the 1 million mark sometime next year.