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Largely Overlooked: Satellite Prices Rising

ico_12.gif Satellite providers Dish Network and DirecTV are raising prices, effective early February, for the fifth consecutive year. DirecTV is hiking its two most popular packages 11.1% and 10%, while Dish is increasing the price of three of its four packages an average of 5.9%. However, that’s probably new news, if you rely on consumer press for such coverage. A quick search of recent articles about cable and satellite price increases reveals decidedly one-sided coverage. We found scant coverage specifically about the satellite increases, and those articles generally featured no commentary, no quotes, no consumer reaction. Conversely, a slew of articles about cable price increases included a heavy helping of commentary and quotes from consumers, consumer advocates and regulators. (Much of the coverage was driven by the FCC’s cable pricing survey, released in December, that excludes satellite TV prices.)

Beyond the disparity of press coverage, the satellite price hikes underscore an important and frequently glossed-over reality: the pressure of rising programming costs. All video providers purchase the same networks from the same owners and therefore face the same reality of rapidly rising wholesale programming costs. When Verizon recently increased its video prices 8%, wholesale costs were a big factor, just as they are with the satellite providers’ latest increases. Until content providers drop their wholesale prices, or reduce their price increases, it’s unrealistic to expect retail video prices to drop significantly—whether the provider is cable, satellite or telco.

Posted on January 31, 2007 01:25 PM | Comments (0)

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