Q. I subscribed to Sling TV from the beginning and it was great to get some good programming for just $20 a month. But they just raised the price to $25 a month. It’s still a good deal, but is this the beginning of things to come? Will prices go up again and again like cable and satellite? What about DIRECTV Now raising prices? — Wendy, Houston.
Wendy, you are right. Sling TV in July of this year raised the price of its base “Orange” programming package, which includes ESPN, from $20 a month to $25 a month. It was the live streamer’s first price increase in three years, but, sorry to say, the next one will likely come much, much sooner.
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It’s hard to believe that Sling TV offered more than 30 channels (including ESPN, AMC, CNN, Comedy Central, Cartoon Network and the Disney Channel, among others) for just $20 a month for more than three years. (The live streaming service, which is owned by Dish, debuted in January 2015.).
The cost of acquiring the rights to carry those channels undoubtedly far exceeded the revenue from Sling’s subscribers, which numbers slightly more than two million. There’s no way that Sling could continue to operate with such a challenging economic model.
Now you might say that Dish, Sling TV’s owner, should be content to subsidize its live streaming service to slow down the cord-cutting trend. But Sling is not alone in deciding that enough is enough.
DIRECTV Now, the live streaming service owned by AT&T, in July also raised the price of its base package, from $35 a month to $40 a month.
In addition, for the first six months of 2018, AT&T sold the 60-channel base plan for just $10 a month for the first three months. However, AT&T quietly cut off that promotion this month. And it’s no wonder. Come on. $10 a month?! They were taking a bath, even though DIRECTV Now added hundreds of thousands of subscribers during the promotion.
Earlier this year, Sony’s PlayStation Vue, and Google’s YouTube TV raised their prices, too. There’s no doubt that the live streaming industry has concluded that it can not make a profit by continuing to offer such low rates. Programmers are increasing their fee demands to carry their channels and the live streamers will have to follow suit by raising prices some more.
And when prices go up further, subscriber growth will slow — fast. Many consumers who have opted for the live streaming service as an alternative to more expensive, traditional pay TV service will hesitate when they see they have to pay $50 a month or more for the basic plan.
So, Wendy, enjoy your $25 a month plan while you can. (It’s still an exceptional deal, even though the lineup is thinner than some, and live streaming itself can be a technical headache.) Higher prices are coming. It’s just a matter of time.
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— Phillip Swann
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