via Directv announces rate increase to begin in February | Consumer Watch, clarionledger.com, 12/27/2012
If you’re a DirecTV subscriber, be on the lookout for a price increase starting Feb. 7. The satellite TV company has announced a major rate increase which they attribute to the rising costs of providing television channels. “In 2013, the programming costs we pay to owners of television channels will increase by about 8.0%, but we have chosen to adjust the prices our customers pay by an average of only 4.5%,” says the company’s website.
You may recall the bitter battles between DirecTV and providers of television content over the past few years. There is a lot of huffing and puffing from both sides, and on occasion a channel will go dark for a while. But if you watch the satellite TV industry, it’s obvious that they can really only go so far; they need each other.
“On occasion, some negotiations of new and existing channel contracts have become public recently (who put that sentence together?!) so you can see we are doing all we can to make sure you do not suffer unfair price increases as a result of unreasonable demands in these disputes,” says a statement on DirecTV’s website. “By holding firm, we’ve held our annual price increases on average below those of cable competitors.”
DirecTV is trying to soften the blow by reminding consumers that they could be paying 8% more, instead of 4.5%.
The company’s most popular package, currently called Choice Xtra, will increase by $2.00 per month, while the Premier package will increase by $5.00. If you have HBO but not as part of the Premier package, you’ll be paying an extra $2.00 a month.
All this comes on the heels of last summer’s battle with Viacom, owner of the lucrative MTV, Comedy Central and Nickelodeon networks. After a lengthy battle culminated in a record-setting 10-day blackout of Viacom programming, Viacom wound up with what is rumored to be at least a 20% increase in rates paid by DirecTV. (Viacom will make an estimated $600 million per year from DirecTV). DirecTV tried to put lipstick on the pig by reminding us that Viacom had initially wanted a 30% increase instead of the 20% they wound up with.
DirecTV isn’t alone, and the pie doesn’t appear to be getting bigger. Competitor Dish Network has perennial battles with providers, and new technologies such as Roku are threatening to take even more market share. Rising dissatisfaction is causing customer loyalty to be a thing of the past (and for good reason).
Ultimately, for consumers, the game appears to offer few good choices. I suspect that, in the new year, a lot of consumers are going to be voting with their feet.