Monthly TV-service bills going up — again
By Gerry Smith BLOOMBERG NEWS
Friday December 25, 2015 5:13 AM
Your television-viewing bill is going up. Again.
While facing a growing number of consumers who drop pay-TV for cheaper online alternatives, Time Warner Cable, Comcast, Dish Network and AT&T all are planning to increase their prices early next year — at the risk of turning off more subscribers fed up with the rising cost of television.
It’s part of the vicious circle at the heart of the U.S. media industry’s current troubles. To attract viewers who are migrating to Netflix and Amazon.com, programmers are spending billions of dollars on developing scripted shows and on the rights to air sporting events — one of the last things that people still watch live.
Companies are passing on those costs to cable- and satellite-TV providers by charging higher fees to carry their channels. Those providers, in turn, are passing on some of those costs to consumers.
In the coming weeks, Time Warner Cable is raising its sports-programming fee by $2.25 to $5 per month and its broadcast-programming fee by $1 to $3.75. Comcast, the biggest U.S. cable company, will increase its broadcast fee by $1.75 to $5 and its regional-sports fee by $2 to $3. Phone and satellite companies are planning similar increases, which vary depending on the package. All say the moves are because of the rising cost of carrying broadcast and sports networks.
For consumers, higher bills have become an annual routine, giving them added incentive to cancel service and join the legions of so-called cord-cutters who piece together their entertainment habits with a growing array of online-streaming services.
The industry is experimenting with new models to attract them. In the past year, Time Warner’s HBO, CBS Corp.’s Showtime and others have introduced online versions of their networks that don’t require cable or satellite subscriptions.
About 71 percent of cord-cutters say they dropped pay-TV service in part because the cost was too expensive, according to a Pew Research Center survey released this week. About 64 percent say they canceled because they can access the content they want using an over-air antenna or through a streaming service, the survey found. About a quarter of American adults don’t subscribe to cable or satellite TV, Pew found.
“Affordability is a main driver for those without cable or satellite, as is the ability to view the content they want to watch somewhere else,” according to the survey.
In 2015, investors have become increasingly concerned about the impact of cord-cutting on profitability, causing a major media stock meltdown in August. And as pay-TV distributors try to keep down costs, their negotiations with programmers have become contentious, resulting in temporary blackouts of channels or cable companies dropping networks entirely.
Starting early next year, some Dish subscribers will pay $2 to $8 more per month on TV packages. AT&T’s
U-Verse customers will see a monthly increase of between $2 and $4, while satellite-TV provider DirecTV, bought by AT&T this year, will increase its monthly bill between $4 and $8.
Overall, Comcast customers’ bills will increase on average by 3.9 percent in 2016, spokeswoman Jenni Moyer said. At Cablevision Systems, it’s 2.9 percent on average.
Cable and satellite companies say the higher prices cover some but not all of the higher programming costs. The amount that Time Warner Cable pays local broadcast channels has risen 85 percent in the past two years, while its costs for carrying sports networks have increased 116 percent since 2008, according to spokesman Bobby Amirshahi.