According to a number of stories, and first reported by the satelliteguys.us website, DirecTV is raising their prices on select programming packages. On average, the pricing will be increased by about 4%, which equates to anywhere from a $3 to $5 price increase on most monthly bills. The price increases are effective February 27, 2008. DirecTV’s chief rival also will be increasing prices on some packages, but also pledged to freeze prices on other packages.
There have been a variety of stories in the past couple months about similar price increases with cable and telcoTV carriers as well. The high cost of programming is certainly a culprit for these price increases, but so are competitive pressures over the past few years that have led to “price wars” in some cases. Video operators are trying to incrementally recoup some of the ARPU lost to price wars. Price increases are inevitable, but competitive pressures are probably keeping them honest.
I just received an email from DirecTV that they are raising their prices again effective March 4, 2009 by another 4%. Perhaps their executives haven’t been watching the news lately. In a time when hundreds of thousands of jobs are being lost, what businesses are raising their prices? DTV’s sales increased by 15% last year (http://www.foxbusiness.com/story/markets/industries/media/cablevision-charter-communications-directv-report-solid-q-earnings/).
Raising prices like this may be good capitalism, but it seems rather un-American at this point in time.