AT&T Hikes Online-TV Prices Up to 30% in Second Boost This Year | Hacker News Reader

AT&T Hikes Online-TV Prices Up to 30% in Second Boost This Year

bloomberg.com

42 pointsJadoJodo17 comments

> AT&T has retreated from competitive pricing and said goodbye to more than 2.3 million TV subscribers in the past year.

I know that accounting-wise this "makes sense," but marginal costs after rolling out the physical network are pretty close to zero, right? How is shedding 2.3 million TV subscribers a profitable move?

If their programming costs are getting higher, then raising prices for a smaller number of customers could be the more profitable move. Particularly if the customers they are losing have more support costs (which I think was also an argument of AT&Ts).

But, it's really hard to figure any of this out when talking about ATT. They have 4 (at least) different ways to sell TV service (DirecTV satellite, AT&T TV, AT&T TV Now, and AT&T Watch TV). If those names aren't confusing enough, then I'm sure they still sell U-Verse service somewhere too.

Each of these services was/is losing customers, but at different rates. And the cost for each service varies a lot too, as does the programming available. I actually subscribe to AT&T TV Now, but I'm on a grandfathered programming package that isn't available any longer. Who knows how many other grandfathered packages exist between the varied services.

The price hike reported here is for the AT&T TV Now service, which was their older IP TV offering. It's been a pretty open secret for a while that they have been trying to get as many people off of that service and moved over to the (more expensive) AT&T TV service as possible.

If the price increase is greater (30%) then the customers shed (5-10% I’m estimating), then it’s profitable.

According to that TechCrunch article, AT&T only has 1.3 million subscribers left. So they lost more than half. The math is not making sense to me. (Unless they lose money on every subscriber, and were hoping to make it up with volume! Ha!)

No, I think they said they have 1.3M subscribers at that price tier and the price increase is only affecting them.

And to go back to your original point, each additional customer does create variable costs. At&t has to pay carrier fees for every subscriber. A customer pays $6/month for ESPN, $0.60 for NatGeo, etc. Maybe the old price tier wasn’t covering the carriage fees + equipment + labor to install

Cable tv content is expensive. It is extremely high marginal cost. A $60 plan may have $55 in content expense. Internet on the other hand....

It is. Especially sports which is one thing that keeps a lot of people on cable (or satellite).

However, I do suspect that as the number of cable TV cord cutters continue to rise, you're left with more and more customers who are less price sensitive and more set in their ways. So it's really not a bad strategy to just give up trying to compete on price and milk an existing customer base for as long as you can.

You're going to lose the people who are ready to move to online streaming and just haven't gotten around to it soon enough anyway.

I jumped on DirecTV Now early on when they were offering a free Apple TV when you did a minimum of three months at $35 for the "Go Big" package. Even without the ATV it was a legitimately good deal.

Then last year they went to $40... still a good deal. Then once they hit $50 a few months later I dropped them because there are plenty of other services at that price point. Now it's $65? They're out of their minds.

Comcast, not AT&T, but my mom recently discovered that her Turner Classic Movie channel was not longer activated. After talking to someone on the phone (who suggested a service technician visit), she independently discovered that TCM was being moved to a sports package along with a military history channel and a country music channel.

It was a watershed moment for her. Apparently, there are online services that provide TCM, and now she's considering downgrading her cable service rather than upgrade it and getting an online service to make up the difference.

http://archive.is/oyTaN

A non-paywalled article on the same issue: https://techcrunch.com/2019/10/21/att-tv-now-streaming-servi...

Do people even watch tv anymore?

>Do people even watch tv anymore?

Of course, especially those who didn't grow up in the era of netflix

I thought this old Slashdot feigned ignorance meme died over ago. “do people still watch TV? I haven’t owned a TV in 20 years”.

A quick Google search of the percent of pay TV subscribers will answer that question for you.

Thanks for assuming "feigned ignorance". I indeed have not owned a television in a long time and any attempts at watching one lead to migraine attacks. Considering that the articles about this rate hike specifically mention dropping subscriber numbers, it seems a fair question to ask. I expected a higher level of discourse on HN.

But if you live in any industrialized country and have relatives or friends or joust listen to people talk in the office, you would know thst most people own TVs.

Only 2.6% of households in the US don’t own TVs (https://www.businessinsider.com/how-many-tvs-in-american-hom...). Statistically, it would be hard to think that you would encounter too many people that don’t watch TV.

The smart phone penetration rate is actually lower. Would you be incredulous if someone said “do people actually use smart phones? I haven’t owned one in ten years”.

Don't need to have competitive pricing if there isn't anyone to really compete against.

Well, seeing that the article is specifically about AT&T Now that is delivered over the Internet, they compete against Sling, PSVue, Hulu Live TV, and YouTube Tv.

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