Special Feature: Journalism News

Consumers Will Soon Pay More for Television Service

Dramatic Price Jumps are Just Around the Corner

by Aarushi Agni, Assistant Editor

Look out consumers, new costs are coming your way. 

A slew of factors will drive up the price of television during the coming year.

Network owners are seeking more profits from cable, satellite, and phone companies, raising the stakes for distributors, such as Comcast, DirecTV and Verizon, who may be forced to increase monthly fees or drop channels to cover costs. To the television consumer, this means that fees will go up; AT&T and Time Warner Cable have already hiked up prices more than 7 percent.

In addition, parent companies of major networks, such as ABC and NBC, want to implement a license fee for cable and satellite distributors when they carry local stations from their network. In December, Fox negotiated with Time Warner Cable to get a dollar per month per subscriber fee. The terms of their final agreement were not disclosed, but media consultant Larry Gerbrandt believes that the Fox actions will lead to similar agreements between distributors and other broadcasters.

With ESPN and Discovery’s new programming for special 3D-capable televisions, it is likely that other networks will follow suit by offering new content, according to Derek Baine, a principal consultant of the SNL Kagan media-consulting firm.

There are other price pressures. These include channel upgrades and increased prices for sports broadcasting. These changes, when implemented, could lead to separate, additional costs for consumers who use these specific services.

Changes in the way major television broadcasters and distributors do business will soon introduce a whole new array of costs to television consumers.

[Sources: USA Today; The Wall Street Journal]