DirecTV Customer Defections Not “Immaterial” Exec Says Amid Disney Blackout – “The Annoyance Factor Is Very High”

DirecTV‘s chief marketing officer Vincent Torres acknowledged today that the satellite video distributor is losing customers in a battle with Disney but believes it will “claw back the losses” later.

The company offered subscribers $30 credits to sign up for other services after Disney offerings from ABC to ESPN went dark on the platform when a carriage deal expired close to two weeks ago without a new agreement in place.

“The way we look at it is a short-term and long-term perspective. In the short term, we were offering a very rich credit to customers that are impacted, and that may never be enough for someone who is annoyed that that they can’t watch their college football game over the weekend,” he told investors at the Goldman Sachs media conference.

The credit is like passing on to customers the money saved from not paying Disney. But, “over the long term, yes, customers are annoyed, and with that comes customer churn. We have seen customer defections … it’s not an immaterial amount of customers because any time you have something like this the annoyance factor is very high.”

The major issue is the fact that DirecTV would pare down the number of channels it takes from Disney, and offer them in “genre” or skinny bundles just to customers who want them. That is more contentious than any dispute over economic terms, Torres said, given the shifting landscape for linear television as viewership declines and costly pay TV bundles push more customers away.

“We’re looking to get more accessible packages of content that are focused on genre… We should not force upon consumers the need to purchase things that they don’t want and we should not force this model of subsidies, of having one content subsidize the other content and having customers that don’t watch subsidize the needs of those that do watch. That’s the old model. That’s one size fits all for everybody. This world has evolved and we need to evolve with it.”

The company will take a short-term hit “but over the long term the choice and flexibility that we are fighting for opens the market up much more significantly.”

There’s a legal issue too. Torres said Disney wants to limit DirecTV’s ability to mount a legal fight in future disputes, calling that anticompetitive and the basis of a complaint filed with the FCC. He also slammed Disney for what he characterized as a “self serving” offer to flick the on switch for three hours during the presidential debate on ABC.

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