AT&T® Increases the Price of DIRECTV NOW® Following Market Trends

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Recently, AT&T® completed their acquisition of the media assets of Time Warner® for $85 billion. In fact, the Dallas-based Telco giant had told a federal judge that the merger would lower the prices of DIRECTV NOW®. However, AT&T® now says that the monthly cost of its internet TV streaming service will increase by $5 for existing and new customers.

Earlier this year, the CEO of AT&T® Communications, John Donovan, had said that although the price of DIRECTV NOW® was relatively less when compared to their competitors, it would not remain that way. As per reports, this increase in price is going to be applicable for all DIRECTV NOW® packages. The price hike will take effect on July 26 for new subscribers, and possibly afterwards for existing subs. However, the date can vary based on the billing cycle of the existing customers of DIRECTV NOW®.

AT&T® said that the decision to increase the price was taken as per the pricing trends in the industry. “To continue delivering the best possible streaming experience for both new and existing customers, we’re bringing the cost of this service in line with the market — which starts at a $40 price point,” AT&T® officials said in a recent statement.

The move from AT&T® mirrors similar pricing policies adopted by streaming services such as Sling TV® by Dish Network® and YouTube TV. Reports say that the price hike of DIRECTV NOW® is going to affect close to 1.5 million subscribers in the US and is expected to bring annual revenue in excess of $87.5 million to AT&T®.

Interestingly, one of the reasons why the US Justice Department filed a lawsuit to block the AT&T®-Time Warner® merger was due to fears that it augurs badly for customers. On the other hand, the government lawyers argued that the anticompetitive nature of the merger would end up costing more for subscribers of TV services.

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The lawyers on behalf of Time Warner® and AT&T® termed the argument by the Justice Department as “preposterous” and said that they were entirely based on ill-conceived economics. The companies also asserted that the deal will lead to lowered prices of DIRECTV NOW®, which was an argument backed by the US District Court Judge, Richard Leon.

The Telco giants even said that their merger would pave way for better competition, as alternative and standard cable providers would follow industry trends. Apparently, AT&T® and Time Warner® went on to win the case primarily based on their arguments, but the increase in the prices of DIRECTV NOW® at this time might invoke further debates. As of now, it seems that AT&T® cannot control the industry trends, but only follow it.

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