Commentary

Prices Rise For Virtual TV Providers

Are consumers saving money on new virtual/digital pay TV providers? Well, that’s right now. The near-term challenge: Know your media pricing history and its trends.

YouTube TV is now raising its prices -- from $34.99 up to $39.99. This pay TV provider is not even a year old -- a sign of things to come.

This has occurred on the same day that YouTube TV says it is adding all Turner's cable networks, including TNT, TBS, CNN and Cartoon Network.

YouTube TV started out focusing on big broadcast TV networks -- looking to lure major pay TV consumers seeking highly viewed -- shall we say -- must-have networks. Now, it wants to add high-viewing cable TV network groups. But all this costs money.

Much of the growth of new pay TV providers like YouTube TV, DirecTV Now, Sling TV, Sony PlayStation Vue and Hulu with Live TV comes from their respective low monthly cost -- anywhere from $20 to $50 a month. This looks good compared to the $110-a-month price tag for traditional pay TV services for cable, satellite and telco companies.

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Traditional pay TV providers offer 200 to 300 channels; new virtual digital pay TV providers typically offer 50 to 60 channels. You do the math.

But there is still a price to pay -- for new digital TV platform owners. Profit margins are definitely thinner initially. Down the road, we know there will be increased pressure on traditional TV networks to pay more for high-quality TV and movie productions that make their way to these new digital services.

Who is ultimately going to pay this? The waterfall effect goes from premium TV producers to digital pay TV owners to consumers.

But wait. Traditional pay TV providers are not necessarily being left out of the picture. This year, Comcast, DirecTV and Cox Communications have planned increases  -- albeit small ones -- in the $1 to $5-per-month range. But others, like Dish Network, are raising prices by as much as 15%.

Right now, consumers still have lots of options. But factor in the cost of broadband -- which might be higher, depending on where net neutrality lands.

And those broadband owners? Well, you know those names as well: Comcast, AT&T, Verizon, Dish. Meet the new boss, same as the old boss. And these bosses needs to get paid.

1 comment about "Prices Rise For Virtual TV Providers".
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  1. Eric Fischer from HJA Strategic Consulting, February 19, 2018 at 2:47 p.m.

    Are we going to factor in the potentially increased cost of a house receiving internet services if they cord cut?  Comcast, AT&T, Altice aren't just going to sit there and take it as people leave their cable subscription.  No doubt they will look to increase the montly cost of internet into the house.  For cord cutters, it's easy to see a scenario where the cable company will look to recoup those lost dollars by either offering slower bandwidth at the current monthly charge, or look to increase the charge at the same current level of service.  I would if I were them.

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About the Author

Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.