EXPLAINED: Why your satellite receivers are leased, not owned

It’s been years since DISH and DIRECTV moved to a lease model with their equipment. When both companies started, everything from the dish to the remote was purchased, and you installed it yourself. Now, many new customers get their equipment at reduced cost or free. Existing customers who chose to upgrade themselves can buy the dish, the multiswitch, even the cable, but despite paying over $200 for a receiver or DVR, these items are considered leased. The difference for you isn’t much, but there are some things you can’t do with a leased receiver.

Here’s what you can’t do with a leased receiver:

You can’t open it or modify it. That means no changing out the internal hard drive. This is less of an issue today than in past years. Both DISH’s Hopper and DIRECTV’s Genie come with nice, large hard drives. External hard drives are “sort of” an option, as the support for them isn’t completely dialed in and probably never will be.

You can’t resell it. You know all those receivers you see on eBay? If they’re advertised at significantly less than you see them at Solid Signal, they’re probably leased. Fewer than 1% of satellite receivers are owned and it’s very hard to get an owned one in the first place. If you “buy” a leased receiver, DIRECTV and DISH will refuse to activate it. The exception here is the world of commercial receivers, which are sometimes owned. Even then they aren’t always transferrable.

You can’t donate it. Just like selling, the option of getting a nice fat tax writeoff for donating a receiver is off the table. It’s not yours, so you can’t even give it away. You could donate the remote control or some of the cables, I suppose, but that’s not going to get you a big donation value.

Why receivers are leased but other stuff isn’t

Some equipment, like multiswitches and dishes, is sold to the customer while receivers are leased. In general, the category of “customer premises equipment” which includes everything but the receivers, is considered sold to the customer. Items that live outdoors aren’t really reusable, and things like cable is too hard to reclaim. So really the lease model only works for the receivers, DVRs, servers, and clients.

It’s good for the customer…

On the other hand, there are real benefits to the customer to leased equipment. DIRECTV and DISH will generally replace a leased receiver for only a small fee, and because you’re paying an acquisition fee rather than an outright purchase, you’ll generally get the receiver for a reduced price. Even the retail prices quoted at Solid Signal are lower than the cost to manufacture the hardware. The last time DIRECTV advertised a DVR for “sale” it was $699.

…It’s good for the provider, too

The biggest benefit, though, is to the provider. Businesses have long known about the benefits of leasing. When you lease a receiver, it counts as a depreciable asset in many cases (where state laws allow) and the lease fee is figured differently than a purchase. It’s all business mumbo-jumbo but the bottom line is that the providers are taking advantage of tax loopholes to stay profitable instead of passing costs along to the customer. Everyone wins there.

There’s another benefit, which has been very obvious for the last several years. When DIRECTV leases you a receiver, they have the right to take it back when you’re done with it. They can then refurbish it and put it back out there. That means they make more profit from the same box. That’s not only good for the environment, it’s good for the bottom line. 100% of DIRECTV’s non-Genie equipment is refurbished at this point, with some boxes happily living a third or fourth life in a new home or business.

The bottom line here

So sure, you can’t paint your receiver pink or overclock it, or anything like that, but you do get the benefit of the receiver at a much lower cost. The provider benefits from a whole bunch of accounting tricks, and the environment benefits because receivers are able to be used over and over again.

If you’re ready for new satellite TV equipment, shop at Solid Signal for everything you need or call us at 888-233-7563 for free advice on what you might need.

About the Author

Stuart Sweet
Stuart Sweet is the editor-in-chief of The Solid Signal Blog and a "master plumber" at Signal Group, LLC. He is the author of over 9,000 articles and longform tutorials including many posted here. Reach him by clicking on "Contact the Editor" at the bottom of this page.