The high cost to attract new customers is why churn is such a problem and as you said why they can justify a customer retention department willing to give away a lot to keep customers. The churn percentage has pretty much held constant for the last few years, but as the total subscriber base increases, a constant percentage translates to an increased number of shut-offs per month. Therefore the marketing costs just to maintain their subscriber levels increases every month.
The last I heard, DIRECTV's acquisition costs were even higher than Echostar's $430. I don't know what their gross margin is, but it seems to me it would take years for either company to break even with a new customer.
The last I heard, DIRECTV's acquisition costs were even higher than Echostar's $430. I don't know what their gross margin is, but it seems to me it would take years for either company to break even with a new customer.
