The TV Answer Man!

Pay TV Fee Hikes: Old Habits Die Hard

News Analysis
Dish yesterday became the fourth major pay TV operator to announce a price increase in their 2018 monthly programming packages for existing subscribers.

The increase by each operator is not dramatic, ranging from $2 a month to $10 a month for some plans. But the decision to raise consumer bills at this point should raise concerns about each company’s priorities, and sensitivities to changing conditions in the marketplace.

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Every major pay TV service is losing subscribers now due to everything from the explosion of cheaper online alternatives (Netflix, Sling TV, Hulu, Amazon Prime, etc.) to the increase in cord-cutting to sub-par customer service.

But the underlying cause of all three reasons — and other reasons that could be cited here — is that the cost of pay TV is too damn high. Although some pay TV services have launched lower-cost plans in the last year or two, when you add equipment fees, broadcast fees, Regional Sports Network fees and a host of other inexplicable fees, you are still paying far too much.

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Some operators say their average customer now pays around $100 a month, just for video service.

However, instead of listening to what their defecting customers are saying about escalating monthly bills, the pay TV operators are moving forward with even more fee increases.

Why?

Because it’s what they do. For the last several years, the major cable and satellite operators have increased their programming packages by roughly 3-7 percent a month, although the hike has exceeded the rate of inflation each year. The annual pay TV fee increase has become as certain as death and taxes.

The pay TV services say the increases are needed to offset the rising cost of buying programming from the networks. But the consumer doesn’t care. He or she just knows that the bill is going up again.

With so many programming options online now, the pay TV ops can’t get away with it anymore. They will take another subscriber hit this year, and the next year, and the next year, if they keep raising prices.

That will soon become as certain as death and taxes, too.

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— Phillip Swann