Traditional pay TV — cable and satellite — is in a bad place. Every three months we get a new record for the number of people cutting the cord in favor of new streaming services. Even when pay TV companies start a streaming service like Sling or DirecTV Now, the price is so much lower than a traditional cable bundle that the cable company is making zero profit.
So, faced with an existential threat to its way of doing business, is the pay TV industry a) slashing prices, improving customer service, and improving channel choice, or b) milking its money-maker until it’s dead cold?
Assuming you answered b), you can look forward to a successful career in the telecoms industry. Dish has today become the fourth pay TV provider to warn customers about significantly above-inflation price rises coming in 2018. It joins Cox, AT&T, and Comcast on the list of shame.
TV Predictions got the complete list of price changes coming to Dish customers. Depending on the package you have, it works out to be a price increase of around 10%:
Welcome Pack — $19.99 to $22.99
Smart Pack — $41.99 to $44.99
Dish America — $54.99 to $59.99
America’s Top 120 — $69.99 to $74.99
America’s Top 120 Plus — $74.99 to $79.99
America’s Top 200 — $84.99 to $89.99
America’s Top 250 — $94.99 to $99.99
America’s Everything Pack — $144.99 to $149.99
In case you were wondering, the US inflation rate currently sits at 2.2%. Of course, that won’t really matter, given that pay TV prices have been marching steadily upwards for the last 20 years:
Pay TV providers tend to blame the cost of content for price increases for customers, but the simpler answer may be that most people don’t notice or care. “Churn,” the industry name for the percentage of subscriber turnover, sits reliably around 1-2%. Subscriber loss can be attributed more to the lack of young people signing up for pay TV, rather than longtime customers ditching their plans.
So, from the perspective of the pay TV companies, slowly ratcheting up prices doesn’t have a big downside, and goes some way to filling the hole left by lower subscriber numbers.
But it’ll be a temporary stop-gap at best. Dish has realized that streaming is the future, hence the aggressive rollout of Sling TV, its streaming platform. Unfortunately, while Dish’s subscriber numbers are impressive, the low cost — plans start at $20 — can’t rival the $75-a-month plans that are typical for cable TV. Pay TV is making the most of its customers while it can, because a reckoning is slowly but surely coming.