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DirecTV Campaign Yields More Subs, Less Churn

Despite its planned merger with former rival EchoStar, DirecTV is undertaking an aggressive marketing campaign that is gaining additional subscribers while correcting subscriber churn.

That was the assessment of DirecTV president Roxanne Austin, who reported that the nation’s largest direct broadcast satellite provider has now tallied a cumulative 10.7 million subscribers after posting 405,000 net new subscribers in the fourth quarter of 2001. On a gross basis, 910,000 new customers bought DirecTV systems in the quarter, the company said.

Austin said the results substantially exceeded company expectations, and full year gains of 1,345,000 net new subscribers were registered as of Dec. 31, 2001.

Austin said that such results in a difficult economy prove that the DirecTV team has not lost its focus amid the confusion of the pending EchoStar merger.

“We have made significant changes across our enterprise — such as strengthening our customer service operations — that enabled us to lower customer churn in the fourth quarter,” she said.

She reported churn in the fourth quarter was down to 1.6 percent, while churn in the prior two quarters was 1.7 and 1.9 percent, respectively.

In addition to improved customer service, Austin attributed the improved churn number to better credit checks on new subscribers and new programs that require one year subscriber commitments. She said churn numbers decrease dramatically among subscribers that have had DirecTV for a year or more.

Austin reported that following the recent launch of a new spot-beam satellite, DirecTV was able to fully comply with federal must-carry mandates and is now providing all local channels in every market it serves with local services.

At the same time, the company plans to launch another new satellite in the spring, and will expand local services into additional markets including Hartford, Conn., and Las Vegas.

Meanwhile, the DirecTV team is encouraged by ratings of its two HDTV channels, and is planning to add a third later in the year.

Interactive television is also being expanded, Austin said, with the addition of the NBC Virtual Channel, accessible by set-top integrated receiver descramblers powered by Wink. Among other things, the service will provide viewers with on-demand news and financial reports.

Austin also announced that effective Feb. 1, DirecTV would offer simplified programming packages offering increased value.

DirecTV will offer two new packages called Total Choice Plus and Total Choice Premiere, and will allow customers to bundle local channels with various programming packages at significant discounts.

The core Total Choice package will carry a $31.99 monthly fee, or $37.99 with local channels. The Total Choice Plus package, which includes Total Choice basic and the expanded Family Pack will be $35.99 monthly, or $39.99 per month with local channels. Total Choice Premiere, which includes Total Choice Plus with HBO, Cinemax, STARZ!, Showtime and Sports Pack add-on premium services will be $81.99 monthly, or $85.99 with local channels.

Also, Total Choice and Total Choice Plus subscribers can add-on individual premium services at reduced rates. One premium service carries a $12 additional charge per month, two services carry a $22 additional fee; three services are $31 more, four services are $39 more and five services are $46 more.

New packages also apply to Spanish language services in the Opcion Extra Especial ($31.99, $37.99 with local channels), Opcion Ultra Especial ($35.99, $39.99 with local channels), Opcion Premier ($81.99, $85.99 with local channels.