Sony announced today that the prices for all of its PlayStation Vue live TV streaming tiers are going up $5 starting July 24th. This announcement comes on the heels of AT&T announcing its own $5 hike for competing service DirecTV Now. YouTube increased its fee for YouTube TV from $35 to $40 in mid-March, which appears to have opened the door for these price bumps. Sony's price increase will take effect for pre-existing Vue customers starting July 31st.
In a statement on Sony's PlayStation blog, the company said, "Unfortunately, we must increase the price of our multi-channel plans to keep pace with rising business costs and enable us to continue offering a better way to watch the best in live sports, entertainment, and news."
Sony said that the price increase is partly to help pay for additional content and services: "We vow to continue providing exceptional service to our customers, with plans to add more broadcast stations and content that resonates with fans, as well as ongoing feature enhancements."
Both AT&T and Sony's announcements occur in the wake of Disney acquiring the entertainment assets of 21st Century Fox from News Corp for $71 billion, barely beating out Comcast for the prize. But while Disney owns the ESPN family of sports networks, Fox Sports was not part of its acquisition. (Disclosure: Download.com and CBS Sports are owned by the same parent company.) Disney also acquired all of the shows that are produced by 21st Century Fox Television, but not the Fox channel, itself. Some of these productions, such as This Is Us and Modern Family, are shown on other channels.
No matter how you sort out the increasingly complex ownership stakes of the major TV networks, media consolidation is notorious for its negative impact on customer fees; providers anticipate that their own costs will go up as competition goes down, and these costs are passed down to their viewers. The cynically minded may say that it's at least a good excuse.
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Live TV streaming over the Internet continues to gain favor every year as the services expand and allow a greater number of people to cancel their cable or satellite subscriptions, a phenomenon known as cord cutting. The Leichtman Research Group recently reported a net loss of over 300,000 of U.S. subscribers just in the first quarter of 2018, nearly tripling numbers from Q1 2017.
In this same time frame, live TV streamers like PlayStation Vue and DirecTV Now, grew their subscriber base by 400,000 in Q1 2018, compared to about 265,000 in Q1 2017. Based on these numbers, the price increases we are now seeing for live TV streaming may be influenced by the shift in demand, in addition to providers anticipating higher content fees.
- The rising demand for live TV streaming and the consolidation of content producers are combining to create price spikes. However, Apple's long-rumored TV service may disrupt this pattern, as the prices for 4K movies on the iTunes Store have already.
- Disney's acquisition of 21st Century Fox's entertainment properties will probably have more ripple effects that are yet to reveal themselves.
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