As they say (whoever “they” are), there’s a first time for everything. This week, it’s AT&T keeping a promise their CEO made back in December. During a Question and Answer segment of the UBS Global Media and Communications conference, AT&T CEO Randall Stephenson made promise that he now clearly intends to keep. According to Stephenson:
DirecTV is adjusting the mix of channels and the price points for its DirecTV Now service as it is in the process of “thinning the content out” to channels that are “really relevant to customers” in an effort to keep the price tag at around $50-$60.
Fast-forward to this week, and it’s official. First reported by Cord Cutter News and verified by TechCrunch, the price for DirecTV Now will see a $10/month increase, bringing their starting package to $50/month. The pricing increase is expected to take effect as soon as March 12, and will impart all current and potential customers.
To add insult to injury, DirecTV Now will also offer fewer package options, with their entry-level package seeing a decrease in total channels from “65+” to “40+”. Unlike the current 4-tier system, the new offering will come in 2 sizes: “Plus” (40 channels, $50/month) and “Max” (50 channels, $70/month).
Current DirecTV Now subscribers can keep their current plan with AT&T allowing them to be grandfathered in. All customers should plan to see the $10 price increase on their bill. Customers opting for the new plan will see HBO included as part of the $50 or $70 package (previously a $5/month add-on).
It wasn’t long ago that the concept of cord cutting was all about spending less. By eliminating a traditional cable subscriptions, you would be left only paying for what you really wanted.
In an effort to maintain cable subscribers, DirecTV Now launched in late 2016. The idea was to offer a relatively low-cost “skinny” bundle of streamed tv channels to tempt cord cutters into more traditional cable content. Since then, the service had added additional programming tiers and increased the starting price by nearly 15% from $35/month to $40/month.
This new pricing structure breaks down to a total increase of roughly 42% since the service launched 2 years ago. That kind of price hike is sure to impact the services longterm viability. Last quarter, DirecTV Now saw of decline of over 1/4 million subscribers (267,000).