It’s official. Once the preferred starting price point for many of the digital cable alternatives, the $35-all-you-can-stream bundles will, by the end of the month, vanish from the market.
That is because AT&T this week decided to raise its DirecTV Now prices, meaning all of its streaming TV packages, including the base $35 monthly subscription, will be $5 more per month for all customers as of July 26. Sony also announced it will be charging $5 more per month on all PlayStation Vue tiers, with the cheapest bundle now starting at $45 per month.
Google did something similar earlier this year, bumping up the cost of its YouTube TV streaming service from $35 to $40 per month for new customers.
So what gives with the seemingly industrywide markups?
Price increases come in bunches, said Brett Sappington, a pay TV expert for the research outfit Parks Associates. “The fact that they’re all doing price hikes in a group helps them,” he said.
Most of the companies initially launched with really low prices, and leaner content offerings by association, to attract the most attention. As the bundles have fattened, so too have the prices, Sappington said.
Currently, there as many as 6 million subscribers to online pay TV services in the U.S., according to Parks Associates. That number will shoot up to 9 million subscribers by the end of 2018.
And while Sling TV, with an announced 2.3 million subscribers, is the industry leader, others are successfully jockeying for position, each with a slightly different proposition.
It follows, then, that if one service raises its prices, the others can surely afford to do so too without fear of losing subscribers to the competition.
As it stands, cord-cutters have two types of service options: the beefy $40-or-more plans or the skinnier $25-and-under plans. In the former camp are DirecTV Now ($40 base plan), Hulu with Live TV ($40 base plan), YouTube TV ($40 base plan), PlayStation Vue ($45 base plan) and fuboTV ($40 base plan). In the latter group, Sling TV ($25 base), Philo TV ($16) and now AT&T’s WatchTV ($15 or free for some AT&T Wireless subscribers) might satisfy someone who needs minimal local or sports stations.
One can most certainly expect these prices to continue to climb.
If there is a silver lining, it is that these alternative models have forever altered how networks are packaged and sold to all pay TV companies, thus carving out a path for truly a la carte TV to potentially sneak its way into the market.
For proof, look no further than Charter’s Spectrum, which is hoping to reclaim customers with something called “Spectrum TV Choice.” Offered to internet-only customers in some markets, the product lets people get all of their local stations and pick 10 additional channels — from a lineup of 75 stations — to build a custom skinny bundle.
It costs just $22 a month, making it extremely compelling for the person who initially cut the cord solely to save money.
So — and I never thought I would say this — if you are looking for the best deal in TV, maybe you should keep your eyes on the cable companies for a change.
Jennifer Van Grove writes for the San Diego Union Tribune.