AT&T to hike price of DirecTV Now

Other subscriber costs may drop

AT&T told a federal judge this year that its landmark merger with Time Warner would probably result in lower prices for its DirecTV customers. But the telecom giant is saying that it will raise the price of DirecTV’s online streaming service, DirecTV Now, by $5 a month for new and existing customers, according to an AT&T spokesman.

The decision affects all service tiers of the product, according to Cord Cutters News, which first reported the change. That brings the base tier to $40 per month and the top tier to $75.

In a statement, AT&T said its decision was driven by industry trends.

“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 said in the statement.

The move mirrors price increases among other online streaming services.

Last week, Dish Network’s Sling TV announced that it was raising the price of its base package, Sling Orange, by $5 per month, to $25. YouTube TV raised its price by $5, to $40 per month, in March.

AT&T’s price hike takes effect July 26 for new customers and possibly later for existing customers. If applied across DirecTV Now’s entire userbase of nearly 1.5 million customers, the price increase could mean more than $87.5 million a year in new revenue for AT&T.

The announcement comes days after an industry analyst said AT&T had also increased an “administrative fee” on its wireless customer bills in a recent move that could generate almost $1 billion a year in additional income. The analyst speculated that some of the fee could be intended to cover the costs of the merger.