Charge! Ops Hike Fees For Sports, Broadcast

Special charges levied to offset spiking retrans, rights costs
Author:
Publish date:

The start of the year is traditionally when cable operators initiate rate increases, but now more companies are focusing on specific types of programming — broadcast TV and sports — to lessen the blow to customers.

Cable operators have tried to maintain increases for monthly service in the 3% to 5% range, but have been forced to offset skyrocketing retransmission consent and sports fees with special charges. Several pay TV providers have initiated separate fees for broadcast TV and regional sports networks over the past few years to ease the pain of those costs.

Yankees-Twins Wild Card.jpg

RSN fees have become a way to pass pricey sports costs on to subs. 

DirecTV was one of the first multichannel video programming distributors to debut an RSN charge, back in 2012, and this year those fees will rise again. According to DirecTV parent AT&T, beginning Jan. 20 RSN fees will rise, depending on the tier selected, by $1.80 to $1.90 per month for customers.

The satellite-TV provider will also raise the price of video packages from Basic to Premier between $1 and $8 per month.

Customers of AT&T’s U-verse TV wireline U-family, U200 and U400 video packages will see increases of from $3 to $7 per month. The broadcast surcharge for the service will also rise by $2 per month.

Dishing Out Hikes

Rival satellite player Dish Network is also raising rates for English-language video packages by $3 to $5 per month and for DishLatino packages for $2 to $5 per month, beginning Jan. 15.

Dish said it will raise the price of its Welcome Pack from $22.99 a month to $29.99 a month; its Smart Pack from $32.99 a month to $35.99 a month, and its Dish America tier from $47.99 a month to $52.99 a month. Rounding out its offerings, Dish will increase monthly pricing for America’s Top 120 from $62.99 to $67.99; America’s Top 120 Plus from $67.99 to $72.99; America’s Top 200 from $77.99 to $82.99; America’s Top 250 from $87.99 to $92.99; and America’s Everything Pack from $137.99 to $142.99.

Customers who signed up for a TV Price Guarantee or other promotional pricing will continue to pay the same price for their core English-language package, Dish said, while DishLatino customers will receive the newly reduced price until the conclusion of the guarantee or promotional period.

“All pay TV providers have had to accept significant price increases from programmers to carry their channels, including local channels (ABC, CBS, Fox and NBC),” Dish said in a statement. “Dish works hard to negotiate fair deals with programmers to keep channel costs as low as possible,” adding that the company itself is absorbing some of the overall cost increases instead of passing them on to customers in their entirety.

Altice USA said its customers’ average bill will rise by about 3% in 2019.

Midsized operator Mediacom Communications also began implementing rate increases on Jan. 1, again tied mostly to broadcast and RSN charges which, according to the cable company, vary slightly by market. One example: in Fulton, Ill., Mediacom increased its broadcast-TV surcharge by $1.35 to $12.73 per month, while its RSN surcharge rose 37 cents to $3.34 per month. On the video package side, its Family TV product rose $2 to $80.49 per month, a 2.5% increase.

According to the Clinton (Iowa) Herald, Mediacom senior manager of government affairs Katelyn Hotle said the decision to raise rates is not made lightly.

“The decision to make price adjustments is always a difficult one,” Hotle said in a letter to Fulton city administrator Randy Boonstra, according to the Herald. “We are very reluctant to raise video prices because, when we do, we lose subscribers. However, cable and satellite companies are constantly being pressured by the programmers we buy from to pay more for the channels we carry.”

At Comcast, the focus has been on increasing fees to help offset rising costs. The biggest hike is in its broadcast TV fee, a charge implemented to help ease the pain of retransmission consent costs, up 25% to $10 from $8 per month. Comcast’s regional sports network fee, which is based on the number of RSNs carried in a given market, rose about 20% ($1.50) per month from a range of $6.50 to $6.75 per month to one of $8 to $8.25 per month.

Equipment Fees Rise, Too

The country’s largest operator also increased its router/home gateway rental fee by $2 (from $11 to $13 per month) and its digital adapter fee by $1 (from $5.99 to $4.99 per month)

“We continue to make investments in our network and technology to give customers more for their money — like faster Internet service and better WiFi, more video across viewing screens, better technology like X1 and xFi, and a better customer experience,” Comcast said in a statement. “While we try to hold costs down, price changes are necessary for a number of reasons, including the continually increasing costs associated with carrying the programming our customers demand, especially broadcast television and sports programming, which are the largest drivers of price increases.”

Charter Communications’ emphasis was also on increasing specific fees. Charter began notifying customers of its plans to increase certain fees for 2019 in October — they went into effect in November — including its Broadcast Fee by $1.10 per month to $9.95; and its set-top box rental by 50 cents from $6.99 to $7.50 per month. Charter’s Spectrum broadband service also was subject to increases, as Spectrum Internet customers who already subscribe to Spectrum TV saw their rates rise from $54.99 to $59.99 per month. Non-Spectrum TV customers saw broadband rates rise from $64.99 to $65.99 per month.

Related