That Promise Didn’t Last Long: AT&T Raises DirecTV Streaming Price

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When AT&T Inc. (NYSE: T) was battling the U.S. Department of Justice over the proposed acquisition of Time Warner, the company told the court that the $85 billion merger was likely to lower prices for AT&T’s DirecTV customers. Less than a month ago the judge in the case approved the merger, the deal was completed June 14, and last weekend AT&T raised the price of its DirecTV Now streaming service by $5 a month.

According to a report at Ars Technica, the company said it began notifying customers of the price increase over the weekend. The rate hike becomes effective on July 26 for new customers and for existing customers depending on their billing date.

We know, you’re shocked, shocked, at the AT&T’s temerity. But there is an explanation for the price hike. The company said in a statement:

To continue delivering the best possible streaming experience for both new and existing customers, we’re bringing the cost of this service in line with the market – which starts at a $40 price point.

Got that? To keeping giving customers the same service they’re already paying for, it’s now necessary for those customers to pay $5 a month more because that’s what everybody else is paying. How can AT&T remain competitive if it charges less than everyone else?

AT&T is not lying about its competitors. Dish Network recently bumped up its price by $5 a month for Sling TV, and Google raised its YouTube TV price by a similar amount in March.

Last week AT&T reportedly raised a so-called administrative fee on its wireless service that could generate as much as $1 billion in additional revenue annually for the company. The DirecTV increase adds another $87.5 million based on a current subscriber total of about 1.5 million.

Now AT&T just has to find a way to raise prices enough to cover the remaining $82 billion or so they spent on Time Warner.