Depending on where you live, that bill you’re getting for DirecTV service may as well be printed right from the satellite dish installed on your roof, because it’s about to get even higher – all thanks to the many regional sports networks that are in play in many areas.
In an attempt to offset the high costs that these RSN’s are asking, DirecTV started imposing a monthly fee in areas where there are many of these networks (New York and Los Angeles immediately come to mind). The good news, though, was that it would only affect new DirecTV customers (note that the fee went into effect in August, right before the beginning of the NFL season, as well as that of DirecTV’s “Sunday Ticket” premium package).
As they say, all good things must come to an end.
No, the surcharge stays – but soon, existing DirecTV customers in these areas are going to get hit with it.
“It’s a judgment you have to make based on responsible churn,” DirecTV chairman and CEO Michael White said during a fourth quarter company earnings conference call on Thursday afternoon, adding that the collections from the fee of around $3 from new customers during the last six months doesn’t even come close to meeting its RSN expenses.
This revelation came about one month after White warned that the fee would roll out into other markets; at that time, he promised not to impose an RSN surcharge “100% across the board,” or, for all DirecTV subscribers in the country, no matter how many RSN’s they have. “I think it’s more for those metropolitan areas where sports are, in my mind, fairly high-priced,” he said in January, referring to the one-fifth of the U.S. “where you’ve got regional sports costs that are out of control.”
And once all of the cable operators start to follow suit with Verizon FiOS and produce their own RSN fees for their own customers, that will be when the “out of control” train will officially leave the station.
Will Michael White stay true to his word and refrain from expanding RSN surcharges beyond the “upper 20%”? Stay tuned.