Despite of the increase in affiliate fees, pay TV operators are trying hard to keep basic video rate increases below five percent for 2017, even though the hikes are more for broadcast and local sports network fees. Pay TV operators are considering big cost increases via different charges on the user bills to cover for retransmission rights for broadcast stations and for high sports rights fees.
The overall video rate hikes are under five percent for many of the top cable TV providers. Charter Communications, which is the second largest cable operator in the US, was not willing to offer any information on the matter. However, it is reported that charges under “sports surcharges” and “broadcast fees” have climbed to as much as 66% in some of the cases.
Comcast, the largest cable operator of the country with almost 22 million video subscribers, is planning to increase the monthly rate for by 3.8% on average from Jan 1, 2017. In addition to this, Comcast is also planning to increase their broadcast charges, a fee to help them offset the hike in retransmission consent charges by 40%, to seven dollars per month from five dollars per month. Also, the regional sports network fee will increase by 66% to five dollar per month from just three dollars a month.
“We continue to make investments in our network and technology to give customers more for their money – like faster Internet service and more WiFi hotspots, more video across viewing screens, better technology like X1 and a better customer experience,” Comcast said in their statement.
“Unfortunately, the costs we are charged to carry popular networks continue to increase significantly – especially broadcast television and sports programming, which are the largest drivers of increases in price adjustments. On average, nationally, the customer bill will increase by 3.8% in 2017, less than half the projected increase in our programming costs,” officials added.
Dish Network had managed to avoid implementing RSN and broadcast surcharges previously, but they are also unable to hold on as the retransmission fees are increasing. “The largest cost for Dish is the amount we pay programmers,” Dish said in a statement.
“The fastest growing programming costs relate to local channels. We work hard for fair deals that keep channel costs as low as possible,” Dish Network representatives said. “Unfortunately, Dish and all other TV providers have had to accept some significant price increases from programmers. Dish is absorbing some of these costs rather than passing everything on to our customers.”