AT&T says it’s raising the price of its DirecTV Now streaming pay-TV offering to $40 for the basic service and $75 for a premium package, a $5 per month increase. The rationale: “. . .we’re bringing the cost of this service in line with the market,” AT&T said in a statement to Engadget.
For the last year, AT&T has assured regulators that its Time Warner acquisition wouldn’t give it an unfair level of control over the broadband and media markets and lead to higher prices. But ill-timed moves like this one prove that AT&T will unapologetically leverage its distribution channel and content acquisitions in ways that raise prices not only for AT&T subscribers but for all pay TV subscribers.
“One of AT&T’s key arguments for the Time Warner merger was that DirecTV’s business was falling apart as cord cutters and the new competitive pay-TV landscape took on the business,” tweets the Open Market Institute’s Matt Stoller Monday. “Turns out DirecTV is so weak that it is . . . raising prices.”
A study of the AT&T/Time Warner merger by Berkeley economics professor Carl Shapiro found that TV consumers could be paying as much as $571 million in additional TV fees by 2021. This mainly comes from AT&T charging other pay-TV companies more to license popular Time Warner content like HBO and CNN. The pay TV providers then pass the costs onto consumers. AT&T objects to this analysis, saying it fails to recognize that prices are set through “the realities of bargaining in the industry.”
AT&T, meanwhile, has already announced plans to, in one expert’s word, “weaponize” the Time Warner video…