There were two developments yesterday in the TV technology world — both coming from AT&T — and they could not be any more linked.
1. AT&T announced in a celebratory press release that DIRECTV Now, its live streaming service, had surpassed the one million subscriber mark after one year in business. While DIRECTV Now still trails rival multi-channel streamer Sling TV by most analyst estimates, the one million milestone is an impressive achievement.
2. AT&T also revealed yesterday in a notice buried deep on its web site that DIRECTV package prices will go up somewhere between $2 a month to $8 a month (depending upon the plan), starting next month.
For existing subscribers, that means that DIRECTV programming plans will soon cost between $56 a month (Select with 145+ channels) to a whopping $159 a month (Ultimate Premier with 300+ channels). And that’s before DIRECTV starts adding in equipment fees, broadcast fees, and regional sports channel fees, which can cost anywhere from $20 to $30 additionally each month.
The 2018 price increase also means that DIRECTV, like most pay TV providers, will continue its several-year-long streak of increasing programming fees, effective in January.
AT&T disseminated these two pieces of information yesterday without a hint of irony. But it says here that the rising cost of DIRECTV’s satellite TV service is the principal reason why DIRECTV Now has reached the one million mark.
And despite recurring technical hiccups, even higher prices for DIRECTV will likely drive more people to DIRECTV Now, which offers a handful of plans from $35 a month to $70 a month. The live streamer doesn’t offer as many channels as its satellite counterpart, but it’s likely more than enough for the cost-conscious crowd. (Plus, DIRECTV Now subscribers don’t have to pay any equipment fees.)
AT&T is certainly aware of this little fact, although it likes to claim that most DIRECTV Now subscribers are coming from other sources, such as pay TV rivals, and the ‘cord-never’ audience.
By continuing to raise prices for DIRECTV — no matter what justification it offers on any given day — it’s ensuring that the satellite TV audience will soon largely consist of wealthy Americans with gobs of disposable income. The middle class and lower class simply won’t be able to afford DIRECTV, or any other pay TV service, much longer.
Consequently, DIRECTV subscriber totals will continue to tumble, and AT&T will continue to issue press releases celebrating higher sub totals for DIRECTV Now.
The press releases might make AT&T look good in the short term. But unless AT&T finds a way to boost per-subscriber revenue from DIRECTV Now — and soon — it’s not going to make the company’s bottom line look good in the long term.
— Phillip Swann