Sears and Ultimate Electronics have parted company with the DirecTv system over mutual "philosophical differences," sources confirmed.
Both retail chains are among the top 10 satellite dealers in the country, according to the TWICE Digital Home Satellite Retail Registry for 1998, and both carry EchoStar's competitive Dish Network platform.
Officials from the two chains chose not to comment in detail on the move, although sources said DirecTv has been offering better terms and programs - such as DirecTv HD retail floor demos - to chains that maintain DirecTv exclusives.
Chuck Cebuhar, Sears general manager, said "DirecTv terminated the relationship due to divergent strategies."
DirecTv traditionally has been pitched by the merchants as an all-inclusive sports system with an extensive complement of movies and basic cable programming, while EchoStar has been pitched as a "value" movie service with complementary sports channels. The key differentiating service is DirecTv's exclusive NFL Sunday Ticket package, which is not open to EchoStar or cable operators.
"In a perfect world, I think Sears and Ultimate would like to offer a selection to people who shop in their stores," said an executive with EchoStar. "They just resented being pressured."
Ultimate Electronics president Dave Workman had "no comment" on the decision, but he didn't dispel the possibility of working out an arrangement with DirecTv.
Said an EchoStar representative: "It's our goal to be carried by more consumer electronics retailers around the country. We believe that many retailers are not pleased about being given ultimatums on what they can and cannot carry in their stores. Many of our top retailers are very successful in offering choice and selection. All we've ever asked is put our product on the shelf, and we believe it will do well against the competition."
When Sears started carrying the JVC line in 1997, DirecTv executives said that offering two satellite systems with such similar services side by side was not an effective sales strategy because it tends to confuse potential satellite customers, sending them out of the store.
EchoStar, meanwhile, recently started offering HDTV programming to Ultimate stores for in-store demo purposes. That service is not yet available to consumers, although EchoStar's Dish Player terminal - which is a combination Dish receiver, WebTV terminal and hard-drive recorder -recently arrived on dealers' shelves.