AT&T is increasing the pricing of its DirecTV Now streaming video service by $5 per month across the board for new customers beginning July 26, according to numerous reports.
The new pricing scheme comes less than one month after AT&T received regulatory approval for its $108.7 billion purchase of Time Warner.
AT&T got the go-ahead from U.S. District Court Judge Richard Leon for the Time Warner deal on June 12.
Rate hikes were a big part of the government’s argument against the merger, a fear that AT&T and Time Warner said was unwarranted at the time. And though the rate hike for DirecTV Now isn’t technically a slap in the face to government – it is keeping the rates for its flagship satellite TV service DirecTV constant – it is a sign that the low, low prices offered by OTT services may not be sustainable.
According to several reports, AT&T is raising the price of every tier of its DirecTV Now service by $5 per month, from its introductory 60-channel “Live a Little” package (from $35 to $40 per month) to its 120-channel “Gotta Have It” tier (from $70 to $75 per month).
"In the 18 months since our launch, we have continued to evolve our DirecTV Now products to serve this new customer set and compare favorably with our competitors," AT&T 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. This change is effective July 26 for new customers and varies for existing customers based on their billing date."
The move follows a $5 monthly price hike by No. 1 OTT service Sling TV for its Sling Orange TV package.