Q. I just got an email saying AT&T TV Now is raising prices again. This is like the second time this year. What’s up with this? Why so many price increase in one year? — Marcia, Biloxi, Mississippi.
Marcia, you’re right. AT&T has alerted AT&T TV Now subscribers that its base ‘Plus’ plan will rise from $50 a month to $65 a month while its Max package will increase from $65 a month to $80 a month. The new prices, which will be for new and existing customers, go into effect next month. (Note: AT&T TV Now used to be called DIRECTV Now.)
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In addition, customers who subscribed to AT&T TV Now’s legacy plans, which were offered before this year, will see price increases of $10 a month per plan.
The hike is angering AT&T’s customers who lament on social media sites that the service raised package prices by $10 a month just last March.
“DIRECTV pulled a bait and switch. Great price at first, (then) quickly raised price by $20 a month. Thanks for wasting my time, time to find another streaming service,” writes ‘Alvin Ross.’
Even long-time AT&T critic, John Legere, the CEO of T-Mobile, is chiming in:
“AT&T’s favorite hobby?! Hiking, of course! Hiking prices higher and higher and higher! How. High. Will. They. Go!?” Legere wrote on Twitter last week.
Why is AT&T raising prices twice in one year, and possibly risking even more subscriber defections? (AT&T TV Now has lost roughly 500,000 subscribers in the last year. The service reported a total of 1.3 million at the end of this year’s second quarter.)
AT&T no longer sees the live streaming service as a way to generate new subscribers to replace customers fleeing its satellite TV service, DIRECTV.
When it first launched the service as DIRECTV Now in 2016, AT&T believed it would attract cord-cutters and other cost-conscious consumers. And that belief seemed to be vindicated when DIRECTV Now generated around two million subscribers in the first two years.
However, it’s now obvious to AT&T and everyone else that the service’s initial low prices ($35 a month was the base in 2016) was the main reason for the subscriber surge. And there was no way to maintain that price structure and keep up with the rising costs of paying programmers to carry their channels. So AT&T has had to steadily raise prices, and in so doing, watch its subscriber totals plummet.
So AT&T now is simply pricing the service where it should be, based on the cost of program acquisition. $65 a month is necessary to pay the programmers and cover the other costs required to run a live streaming service.
I don’t think that AT&T plans to eliminate the service anytime soon, as some have speculated. But I do think it no longer plans to offer price breaks to attract new subscribers.
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— Phillip Swann