Those with the biggest packages will see the steepest increases according to the rate plans that will take effect on February 5. The Ultimate plan is up 6% to $86.99 and Premier is +5.4% to $136.99 Yet the basic Entertainment package will just rise 3.5% to $59.99, DirecTV says.
This year’s annual price hike is especially tricky for DirecTV. It doesn’t want to alarm the FCC or Justice Department, which are reviewing its planned merger with AT&T. Execs also fear that increases will alienate consumers: DirecTV lost U.S. subs in Q3, surprising many analysts. CEO Michael White told them “we are seeing that consumers are becoming much more price sensitive in this economic environment….In the quarter, we saw a pretty significant increase in those [who dropped service] that mentioned price value.” He added that it’s a struggle to raise prices “when median household incomes are flat, particularly for those making less than $50,000 a year.”
Yet DirecTV’s costs keep rising, partly due to ambitious programming deals like the one it struck with Disney last week. It added Fusion, Longhorn Network, ESPN Goal Line and ESPN Buzzer Beater to the bundle.
“We work very hard on your behalf to keep those costs under control, and as a result, have been able to hold our price increase on average below others in the TV industry,” the satellite company says in a message to consumers about the new changes. DirecTV adds that it will offer “new channels to watch at home or stream on the go – including the newly added ESPN and Disney Networks, FX, Fox Sports 1, and more. And, we’re increasing our already leading number of HD channels. We’re also continuing to revolutionize the DVR space, with access to features that let you reverse time. Watch shows that aired in the last 72 hours, even if you forgot to record them. And now you can restart shows that are already in progress with just one click.”
DirecTV will maintain its separate Regional Sports Fee, with prices that could rise as much as $2.14 a month depending on the regional sports networks (RSNs) in the market where the customer lives. “In certain areas of the country (determined by ZIP code), DIRECTV is …contractually obligated to carry multiple RSNs.”
Subscribers with a promotional offer, including new customers with a 12 month discount, won’t be affected by the price increases. At least not yet.