Its service fees will rise by an average of 4.5% on 2/7 due to increasing programming costs. DirecTV has to pay about 8% more for programs, since almost all of its providers are hiking their rates, it said. The company, which recently resolved a bitter price dispute with Viacom, said it is doing all it can to make sure customers “do not suffer unfair price increases as a result of unreasonable demands.”
DirecTV said it has managed to keep its annual price increases below those of its cable rivals on average. Tensions between program makers and distributors are on the rise and leading to some higher prices as the industry’s growth appears to have peaked, reported Reuters/The Chicago Tribune.
DirecTV said in November that customer defections increased as a result of its July dispute with Viacom, which involved a blackout of channels such as Nickelodeon and MTV for 9 days. The loss of 26 networks to 20 million homes for nine full days was unprecedented in the U.S. pay-TV industry in terms of the size, length and scope of the blackout.
RBR-TVBR observation: DirecTV recently added a surcharge to some customers for sports channels separately on several of its most popular programming packages. Yes, sports are increasingly popular, but those that don’t give a hoot about it are getting tired of carrying the load and seeing their rates increase. As we’ve said, la carte is likely coming in some way, shape or form. But for now, it looks like more channels will be dropped from MSOs like Time Warner Cable and fees will be increased from the rest, like we see here. Yep, just keep driving folks to Netflix, Hulu and the like…