Thursday, December 20, 2012

Dish Network Announces A Price Increase

This post is not meant to single out Dish Network.  The truth is every cable operator will be raising their monthly subscriber fees.  The issue is that these price hikes tend to be larger than the inflation rate.  And for consumers facing less income due to job cuts, smaller bonuses, and what is expected to be higher taxes, the cost of cable is looking more and more like a luxury than a staple in the household.

For Dish, their claim is that they haven't raised rates in 2 years;regardless, "Dish Network will increase the price of its core TV bundles between 7% and 20% effective January 2013, with most packages rising $5 per month."  Yes, 20% increase.  The very size of the increase sounds incredulous.  But Dish Network, as I am sure other cable operators believe, will expect that the number of subscribers dropping their service will be smaller than the amount raked in by these higher prices.  And that is because the monthly increase isn't the only price increase that Dish customers will see.  Premium packages, including Spanish Tiers, will see price increases.  So too, the cost of some older cable box monthly rentals in the home.

What effect will these price increases have on their customers?  Will a higher number than expected cut the service?  Dish argues that the need for raising prices is because of higher programming costs.  Time Warner Cable, seeing the same issue, is dropping services.  Dish tried with AMC Networks till their lawsuit with Voom resulted in signing a new carriage agreement. But Dish might just look for other networks to drop to lower those programming expenses.

So this is what consumers will be facing with cable cost increases, and lesser channels on the line-up. And as more and more TV sets become internet enabled, subscribers may just look more closely at cutting their cable cord for broadband enabled viewing.  Household budgets can handle only so much and these announced increases could cause Dish and others even more subscriber losses.