AT&T is once again going directly against its promise of not raising prices following its merger with content provider Time Warner. For the second time this year, the company is jacking up prices on its AT&T TV Now service, formerly known as DirecTV Now.
After raising prices by $10 across the board in March, AT&T is raising prices by another $10 for all plans. Needless to say, customers aren't exactly thrilled that AT&T has taken this mind-boggling approach to streaming, especially after the company was supposed to achieve economic synergies by combining with Time Warner.
We should note that the price increases will go into effect for both new and existing customers, so no one is going to escape AT&T's pricing wrath. For a list of the pricing updates for the DirecTV Now plans, look below:
- Live a Little (65+ channels): $60/month (previously $50/month)
- Just Right (85+ channels): $75/month (previously $65/month)
- Go Big (105+ channels): $85/month (previously $75/month)
- Gotta Have It (125+ channels): $95/month (previously $85/month)
So how does AT&T explain this latest round of price increases? In an email sent to customers, the company said that "programming costs continue to rise" which has forced it to pass on the increases to customers. However, in a court briefing [PDF] last year, AT&T laid out its case for the merger, extolling the benefits of its mashup with Time Warner:
The government, in short, gave the Court no basis for finding that this merger is likely to reduce competition at all, much less substantially. Rather, the evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated “FAANG” companies.
FAANG refers to Facebook, Apple, Amazon, Netflix, and Google. With that said, what's most interesting about this latest development is that it is the complete opposite course of action that you would expect from a company in AT&T's position. The company lost nearly one million DirecTV customers in Q2 2019 (in part due to previous price gouging) and is even facing a lawsuit over bait and switch practices with DirecTV Now pricing. AT&T is now forecasting that it will lose over 1 million customers for Q3 2019.
More specifically, AT&T had roughly 1.8 million DirecTV Now subscribers during Q3 2018. By June 2019, that figure had dropped to 1.34 million subscribers. We'll give you just one guess on what caused those numbers to drop so dramatically…
While AT&T is charging customers $60 just to jump into the cheapest AT&T TV Now plan, competitor Sling TV's Orange and Blue plans cost just $25/month while the more comprehensive Orange+Blue package costs $40/month.