AT&T Sets DirecTV And U-Verse Price Hikes In 2020, Citing Higher Program Costs

Dade Hayes

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AT&T, which is trying to chip away at its large debt load and manage through a period of secular decline in its traditional pay-TV businesses, has set a round of price hikes at DirecTV and U-verse.

Beginning January 19, 2020, some customers of the satellite and cable outlets will see their monthly packages rise by $1 to $8 a month depending on the tier. Current promotional rates will remain in effect for some customers, though once those offers expire, the new pricing will apply. The company posted the changes on its website today and has begun communicating with customers about the new rates, offering a succinct reason for the increase: “because our programming costs went up.”

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The move follows a significant jump announced in the fall for AT&T TV Now (formerly DirecTV Now), the streaming bundle offering. The increases are being implemented as the company continues to hemorrhage pay-TV subscribers. In October, AT&T announced third-quarter results showing 1.2 million fewer premium TV subscribers (a classification that includes DirecTV) in the period, and a loss of nearly 200,000 more on AT&T TV Now.

AT&T is nevertheless barreling ahead with plans to launch HBO Max next May. The $15-a-month service encompasses the existing HBO package and adds dozens of original shows and titles from the company’s portfolio, including Warner Bros. and the former Turner networks. It will be given free to subscribers of AT&T premium video, mobile and broadband.

The company has said HBO Max and AT&T TV, a new “thin-client” service, will be the two ways to get pay-TV moving forward, but still maintains a portfolio of options. Watch TV, for example, launched in 2018 with a basic array of channels offered free to AT&T customers.

Randall Stephenson, CEO of AT&T, will likely field questions about the company’s evolving pay-TV strategy in an appearance Tuesday morning at the UBS Global TMT Conference in New York. Shares in AT&T declined a fraction Monday, closing at $38.04, but have been on an upward trajectory in recent months.

The new rates were first spotted by Phillip Swann, who runs the TV Answer Man blog.

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