fuboTV is raising prices in the wake of its Disney deal while AT&T is boosting first-year pricing on its contract-based DirecTV and new AT&T TV services.

Jeff Baumgartner, Senior Editor

July 1, 2020

3 Min Read
AT&T, fuboTV join the pay-TV price hike party

For the US pay-TV industry, the sailing isn't getting any smoother.

In the wake of YouTube TV's 30% price hike, AT&T and fuboTV are among the pay-TV service providers that are raising prices.

fuboTV, a virtual multichannel video programming distributor (vMVPD) that delivers programming over-the-top, announced it is boosting prices on several of its service plans, including fubo Standard, which is going from $55 to $60 per month.

fuboTV's latest increase comes soon after it struck a new distribution deal with The Walt Disney Company, but it's also being implemented as 11 WarnerMedia channels, including TNT and CNN, are about to go dark on the streaming service, according to Deadline.

WarnerMedia told the pub it was "disappointed" that it failed to renew its deal with fuboTV. The OTT-TV service provider said it had declined to re-up to ensure it could offer a "reasonable price point" to customers and believes that fuboTV's coming distribution of Disney-owned networks, including ESPN, will help bridge the gap. However, the loss of TNT and TBS will keep some NBA and Major League Baseball games off fuboTV's schedule in the coming weeks and months, Deadline points out.

fuboTV, acquired by FaceBank Group earlier this year, is a relatively small OTT-TV service provider with 315,789 subscribers at the end of 2019, but the latest price increase represents another example of how virtual MVPDs are struggling to make already low-margin pay-TV services remain financially viable even as they are highly exposed to the perpetual rise of programming costs.

But those same issues are also impacting larger pay-TV providers such as AT&T, which owns WarnerMedia and is also raising prices on some video services.

According to Phillip Swann, who runs the TV Answer Man site, AT&T is raising the first-year monthly price for new customers. DirecTV is AT&T's legacy satellite TV service and AT&T TV is a new, OTT-delivered service that runs on operator-supplied Android TV boxes but replicates some of the trappings of traditional pay-TV offerings such as large channel lineups and service contracts.

Per Swann's findings online, new DirecTV subs are to pay $59.99 a month for the first year of its Select plan (155 channels), up from a prior price of $49.99. DirecTV has raised the first-year rate similarly for its bigger "Choice," "Xtra" and "Ultimate" packages.

The pricing moves are also similar for AT&T TV, starting with the first-year price of an "Entertainment" plan that is rising by $10, to $59.99 per month, along with increases on AT&T TV's Choice, Xtra and Ultimate plans.

AT&T did not raise the second-year prices for either DirecTV or AT&T TV, Swann points out. However, AT&T is raising the first-year price on AT&T TV just four months after the service was launched nationwide.

The first-year price increase on those contract-based services comes at a critical time as AT&T attempts to slow the rate of its pay-TV subscriber losses. AT&T shed 1.03 million total pay-TV subs in the first quarter of 2020, including 897,000 "premium" subs (DirecTV satellite and U-verse TV) and 83,000 OTT video customers.

The overall US pay-TV industry lost 2.15 million subscribers in the first quarter of 2020, including a loss of 341,000 subs among vMVPDs, according to estimates from MoffettNathanson. MoffettNathanson expects the numbers to be even worse in the second quarter of 2020 as the grip of the pandemic causes more consumers to tighten their belts and not just cut the cord on traditional pay-TV but also drop services from vMVPDs at increased rates.

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— Jeff Baumgartner, Senior Editor, Light Reading

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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