The yearly price increase tango has been with us over a decade. It’s outlasted DIRECTV’s stewardship by three different companies and it shows no sign of stopping. Surely you’ve already heard that prices on DIRECTV service will be rising between three and eight dollars per month, and that more cities are getting the dreaded regional sports package fee. I know that the average DIRECTV customer now pays over $100 per month, and I hear you — pile on all the electronic trickery, the apps and services, and they’re all great but it’s hard to stomach that $100 bill when there’s nothing good on TV.
Let’s get through the standard arguments so we can talk about what’s really going on.
It’s not DIRECTV’s fault.
This one is actually pretty true. DIRECTV actually marks up their channel costs less than they used to because they consistently absorb cost increases from greedy content providers. When you have these companies, the ones that provide local and national channels, increasing their fees by over 300%, that cost increase is hard to stomach. So DIRECTV actually does try to absorb a lot of that cost and pass as little as they can onto you.
You pay more, but you get more.
This year, DIRECTV rolled out 4K and local channel viewing on their app. They continue to freshen up their product line and (I can’t say more but) they are back on track to deliver a killer experience in 2017. There is more sports, more movies, and more channels than ever before. You pay more because you get more. I understand you may not personally care about the content they added, but that’s not the point.
It’s those sports deals. It’s their fault.
Again, true. Sports costs are ridiculous. More and more cities have multiple sports channels, and that’s why DIRECTV continues to charge a regional sports fee. There’s more to watch, so you pay more. In the past, DIRECTV simply paid everyone who asked, but starting a few years ago they started getting picky in the face of ridiculous price increases from some channels. That’s why they still don’t have Pac-12 and The Dodgers Channel… they’re simply too expensive.
DIRECTV’s execs have offered over and over to make these channels available a la carte so if you’re truly interested in them you can pay for them, but it’s the channel operators who shoot that down. They’d rather get a dollar from every single person even if that person doesn’t watch.
So what can you do?
Most people will simply suck it up and not do anything. That’s because it’s true, you really do get a great value with DIRECTV. You get live, streaming, on demand and pay-per-view all in one package, and it’s easy and reliable. You get better customer service and less downtime than cable. That’s worth paying for.
Some people will move over to DIRECTV NOW, the new streaming service that is less expensive but offers fewer features than DIRECTV. Some will move to competitive services which offer even lower prices but even less value in the long run. And some people will just give up.
Then there are the smart ones, who will take this as the opportunity to check out everything that live, free, over-the-air TV has to offer. They’ll get an antenna from Solid Signal and enjoy dozens of free channels on their TVs. They’ll realize what they’ve been missing all along.
What’s the solution here?
At some point it has to tip. Content providers have to realize that with declining ratings, their channels can’t go up in price every year. Some of them will have to realize that it’s not worth putting up seven channels full of identical programming when people watch stuff on DVRs and on demand far more than they used to. At some point, prices will go down.
Think of it this way: fifty years ago, telephone service was ludicrously expensive. Local calls were covered for most people by a single charge, but long distance was charged by the minute. Things changed somewhat, with long distance getting competitive, but the real change came when local phone companies realized that people didn’t get the value they used to from phones. They had the internet, they had Skype, they had cell phones. All of a sudden, local phone service dropped in price and it’s practically free now if you bundle it with something you care about. The market has a way of correcting itself that way.
Am I saying that in the future, DIRECTV will be almost free if you bundle it? “Almost free” is a pretty high bar to set, but it’s very clear that once DIRECTV gets past the greedy corporations holding it hostage, prices will drop… especially if you bundle with AT&T internet or wireless service. It’s coming, and the only question is: when?