Quote:
Originally posted by Dean Roddey
If they gave it away, I'm sure no one would steal it. But I don't remember that one of the pillars of capitalism is that you have to keep cranking the price down until people stop stealing it, otherwise you are evil. |
Although you may not believe it, I was an Economics major as an undergraduate and graduate with honors. I think I am properly trained to discuss capitalism.
Obviously, the goal of any company is to maximize its profits. With satellite service, there is very little marginal cost to DirecTV for an additional customer. The satellites are already in the air, they are already beaming down the signal, etc. The additional costs lie mainly in billing (postage, paper, computers, labor, etc.) and customer service. DirecTV's customer service is abysmal, so I don't think they are spending a tremendous amount on this and likely would not improve it with add'l subscribers.
That having been said, it is critical for DirecTV to look at ways to maximize its revenue. I, for one, believe their pricing model is inefficient. If lowering the price by 5% resulted in a 10% increase in subscribers, they should do it. As you minimize the incentive to cheat, people will subscribe over receiving the signal illegally. There is so much technical b.s. a hacker has to go through to cheat the satellite company (stuff that has to be repeated every week sometimes) that a somewhat lower bill may entice a good number of them to jump to DirecTV. I don't think DirecTV is well served by reacting to programming theft by increasing prices, as it only drives more people to jump ship (both honest and dishonest customers). I think DirecTV would be wise to lower prices to discourage this hobby. These programmers who hack DirecTV won't be making $1,000,000/year (as reported in the article) if people don't need to pay them $20 for having the codes to hack DirecTV. How many people want to waste all that time dealing with all the B.S. over a few bucks a month?
I am not saying they are evil for adopting their current pricing structure. But it seems painfully obvious that the honest people are paying a high price to subsidize the hackers, and I think that's b.s. We shouldn't be punished because DirecTV cannot keep hackers off the system. Paying more than $60/month for television programming is outrageous, but unfortunately consumers have little option.