Out of Control Policy Blog

Humorous DirecTV Ad: Bailouts Are For Market Losers

DirecTV is airing a tongue-and-cheek ad suggesting cable companies are competing so badly that, like the banks and car companies, they will soon have to seek government funds to stay afloat.

The ad, which I viewed last night during the NBA playoffs on the national cable network TNT and a local Houston channel, imagines a board meeting at a big cable company. The cable CEO frets that DirecTV is offering superior service and better choices. He ends by telling the board the company’s problems can be solved by two words: “federal bailout.”

Along with demonstrating that the multichannel TV business is competitive and offering consumers true choice, a reality policymakers often forget, the ad taps the popular zeitgeist that the government bailouts are doing nothing but propping up companies that have made bad business decisions or simply failed to meet customer needs. The zinger is the implication that rather than improve their products or services, some companies are opting for government handouts as a revenue strategy.

It’s rare to see TV ads make policy the butt of a joke. But then again, what does DirecTV have to lose? While, in truth, cable and phone companies are not looking for bailouts, they do stand to benefit from the government’s $7.2 billion broadband stimulus for rural areas—a segment where satellite companies like DirecTV have their strongest presence. Yet the satellite companies will not be eligible for stimulus funds. Considering broadband routinely comes packaged with cable TV, the stimulus bill will be a direct federal subsidy to competitors of satellite service.

The ad does not seem to be on YouTube as of this morning, but it may only be a matter of time before it's posted (as DirecTV’s older ads have been). If I see it I’ll link to it.


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