DirecTV Sues Dish Over 'Why Pay More' Ad
Satellite Operators Lock Horns Over Dish's Programming Pricing Claims
By Todd Spangler -- , 2/12/2010 12:37:00 AM


DirecTV is charging satellite rival Dish Network with false advertising for a TV campaign claiming DirecTV charges substantially more for "the same programming."

Dish's "Why Pay More" ads, which debuted nationwide Feb. 8, imply that customers can get the same channels on Dish as DirecTV -- but for only $39.99 per month from Dish, versus $63.99 per month from DirecTV.

DirecTV filed a lawsuit Thursday in the U.S. District Court for the Southern District of New York, seeking an emergency injunction to stop the ads, an order requiring Dish to retract and run corrective ads, and unspecified monetary damages.

The comparison "falsely equates apples and oranges," according to DirecTV, because its Choice Xtra package -- which has the price featured in Dish's comparative ad -- has more than 140 video channels while the Dish America's Top 120 package offers fewer than 100.

The two-minute version of the ad in question can be viewed on YouTube, here:
YouTube- DISH Network Man on the Street Commercial
YouTube- DISH Network Man on the Street Commercial

Dish's 'Why Pay More' adDish's 'Why Pay More' adDirecTV claimed Dish spent more than $1 million on the campaign in the first three days it aired. "Dish Network has flooded the airways with this false advertising," DirecTV said in its complaint.

In a statement Tom Cullen, Dish Network executive vice president of sales, marketing and programming, said, "We are pleased to compare our programming and prices to those of DirecTV. We stand by our claim that our programming, such as ESPN and Discovery Channel, is the same as their programming, and more importantly, that our customers realize significant savings over comparable programming packages from DirecTV."

Added Cullen, "It is ironic that DirecTV, which the Attorney General of Washington cited as 'standing out for providing some of the most deceptive advertising of any company,' is now taking issue with Dish Network's legitimate comparisons."

That's a reference to the lawsuit against DirecTV filed in December 2009 by Washington Attorney General Rob McKenna alleging unfair sales practices, including "hiding a multitude of fees, planned rate changes and terms that call for automatic renewals."

DirecTV, in its lawsuit, argued that not only does the Dish America's Top 120 tier offer fewer channels than DirecTV's Choice Xtra package, but also that the "type and quality" of channels are also substantially different.

"The programming services Dish Network's ‘Why Pay More' advertisement indicates are the same are in reality very different. They are not comparable. It is a false comparison," DirecTV said in its complaint.

DirecTV called out 18 channels that it offers via Choice Xtra that are unavailable with the America's Top 120 package: American Movie Classics, Animal Planet, BBC America, BET, Bravo, FX, Golf Channel, Hallmark, Lifetime Movie Network, MSNBC, National Geographic, NBA TV, NFL Network, NHL Network, Nick Jr., Oxygen, Speed, and WGN.

The Dish ad includes a series of "man on the street" encounters showing three TVs tuned to Dish, DirecTV and "cable." A Dish spokesperson shows passersby the setup and tells them they "have the same programming, same quality."

After one consumer says, "They look the same to me," the surveyor says: "Get closer. I want to show you something. That's called DirecTV at $63 a month." The "cable" price tag shown is $63.83 per month. When the Dish rep asks another interviewee rhetorically, "Why would you pay more?" he responds, "I'm a dummy."

The two-minute version of the Dish "Why Pay More" ad has run on 10 different national networks, including AMC, BET, Country Music Television, Fox News, Spike TV, SyFy, TruTV and TV Land, as well as more than 20 local channels. DirecTV noted that most of those national channels are available to DirecTV subscribers -- but not existing subscribers of Dish Network's America's Top 120 package.

DirecTV has 18.4 million subscribers, while Dish has more than 14 million. The two satellite TV operators are the second- and third-biggest multichannel video programming distributors in the U.S., after Comcast.
Dish has recently been attacking DirecTV more pointedly in marketing campaigns, including one print ad last summer alleging the programming costs of DirecTV's exclusive NFL Sunday Ticket deal are passed along to all subscribers.

In another spot that debuted last month, Dish took a swing at its bigger satellite rival for celebrity endorsements, noting that Dish has no paid endorsements: "Maybe that's why on average DirecTV customers spend over $175 a year more than Dish Network customers," the commercial's narrator says.