Posted on 01/06/2005 5:27:49 PM PST by holymoly
Satellite TV customers are facing price rises, as operators Dish Network and DirecTV hatch plans to increase rates, despite an ongoing rivalry with cable providers.
Dish Network, owned by EchoStar Communications, plans to raise subscriptions by $2 to $4 a month, the company said Thursday. That translates to an average of 4.3 percent on average charges of $56.11. The new rates will take effect Feb. 1 and affect certain packages, such as the basic service.
DirecTV is also planning to announce a rate hike this quarter, but details are not yet available, said Robert Mercer, a company spokesman. Currently, DirecTV charges an average monthly rate of $66.46 per subscriber.
Despite the rivalry between satellite and cable TV operators, consumers have not benefited from downward pressure on subscription prices.
The satellite companies themselves put the increases down to price of content and to the cost of adding new features to a monthly service. "We've seen programming costs that have consistently risen over the years, and that is primarily why we have seen these price increases," Mercer said.
Dish Network faced a 7 percent increase in programming costs last year, said Kelley Baca, a company spokeswoman.
The pending rate increases will mark the third consecutive year both companies have raised their monthly subscriber rates. DirecTV, for example, increased its charges by an average of 3.3 percent for all its packages last year and in 2003. Dish Network, meanwhile, averaged an increase of less than 2 percent last year and a 4 percent increase in 2003.
"Programming costs are still rising substantially more than inflation and, for satellite operators, customer acquisition costs have been rising significantly as well," said Craig Moffet, an analyst at Bernstein & Co. "It's reasonable to expect prices will continue to rise at an excess of inflation for the foreseeable future."
Cable operators face the same high variable costs of programming as satellite companies do, Moffet said.
Comcast, for example, is expected to raise its rates an average of 5.8 percent this year.
Combined, the satellite and cable industries have been growing at a rate of 2 percent a year, further reducing the incentive to slash prices, Moffet added.
"This is an industry where there are strong incentives for all the players to compete on product differentiation rather than price," Moffet said.
He added that a price war, spread among millions of monthly customers at a time when costs are steeply rising, makes it prohibitive to engage in such tactics.
Dish Network has 10.4 million subscribers, while DirecTV 13.5 million, according to the companies' figures.
NFL Sunday Ticket is no longer being offered on C-Band; and you can't get DD 5.1 audio either.
If it makes you feel any better, Ted Turner is on the outs at Time Warner and has been gradually dumping stock for more than a year.
Thanks for the links. I don't download movies or software, just over-the-air TV broadcasts. What are they going to do to me; make me sit down and watch all the commercials?
Same goes for TLC. They haven't done anything worth watching since Junkyard Wars.
I think one of the problems with A&E is they've diluted their work. Much of the good stuff was offloaded when they launched the History channel.
If you haven't already, check out Corner Gas. It's the funniest show to come along in ages. Season one is on DVD now, a bargain at $25.
It's about time a cable or satelite company stepped up and offered channels a-la-cart. Let me pick and pay for the channels I want, and leave out the 80% of the other crapola channels I NEVER watch.
They block the free feeds on football now.
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