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DirecTV Raises Rates

December 29, 2010 | Author: Ibex Marketing

The number one complaint about cable companies appears to be the increased subscription fees with no change in the service. The DirecTV satellite service is following in a similar trajectory. The company just announced a 4% rate increase, effective February 10. This is similar to a rate increase that they announced a year ago.

According to the company, the increase is needed to pay for higher channel carriage fees from the networks.

I expect that consumers won’t be happy with this development, and it could set off another round of musical chairs as consumers try to find out where the subscription television grass is greener. This is a situation that will only get worse, as we are likely to see more instances of retransmission negotiations that go past the 11th hour and subscribers will find some networks going dark on their satellite or cable service. And when the dust settles, the service will be paying more for the programming, and those increased costs are going to get passed on to the consumer sooner or later. Probably sooner.

As I’ve mentioned before, the steady ratcheting increase of subscription rates is only going to fuel consumer insistance on a la carte plans where you only have to pay for the channels that you want. I believe that this is a losing game for the subscription services, however, because they will see their revenues slashed and it will become increasingly difficult to fund the maintenance and expansion of their physical infrastructure. (Have you priced out the cost of putting a television satellite in orbit lately?) And many content producers will find their revenues plummeting as the automatic enrollment of subscribers come to a screeching halt. As a result, I don’t expect to see a la carte pricing any time soon, unless the government should decide to mandate it.

So if you pay a monthly fee for your television, don’t be surprised when it goes up again.