Rate hikes in the future

[shilton]

Read an article today on Yahoo's Financial pages that in a recent interview, Charlie says he is "Still focused on getting the merger to go through even though it is an uphill climb". He further says there is no "Plan B" if the merger fails but if the merger does indeed falter, rate increases for Dish Subscribers will be an absolute certainty. What the heck...they gamble on the merger and when it falls apart, we are stuck footing the bills!!! I thought Charlie was so very big on keeping costs down compared to the cable giants. My bill is gettin' right up there with what it was when I had cable. Pretty soon, Echostar will charge just as much as DirecTV and the only reason I chose E in the first place was because I could get the same programming for less money!
I will be keeping my eyes on this one.

[JeffP]

Dish is already more expensive than Direct, and they have been for a couple years now. If Dish raises prices, I am sure Direct will follow.

[tampa8]

If you chose Dish over Direct for the very slight difference in price then nothing will ever please you. At some time prices have to rise and yes, without the merger many predicted there could be a price increase. As for the price versus cable - I certainly can't say your right or wrong, I will say the two areas of the Country I live (CT and FL) the two cable companies - Charter and TWC - are quite abit higher with many analog channels and less channels. They do run specials, but the normal cost really is quite abit higher. Then there is the awful "service" .............. Both Dish and Direct have much better track records for service. But this is why I say if your bottom line is cost, in the end you won't be happy.

[Scott Greczkowski]

And Charlie wants to compete with Cable? If rates go up you might as well call Dish Network, Cable TV from the sky.

[shilton]

Wait...please let me clarify my earlier statement. I did not mean to imply that TODAY price is the only factor for me, but of course price does matter somewhat. But, at the time I picked DISH, they were quite a bit less than DirecTv and given the fact that the packages I was interested in were very similar, I chose Dish. That was about 4-5 years ago. Since then, I have dealt with customer service and my hat is off to them, as they have always treated me well. Still, in my area, a Digital Cable package comparable to Dish's AT150, plus Multi-tiered HBO is almost the same price I pay now for Dish. I know prices will rise at times, but seems to me that this increase is the sole result of the fact that Dish will stand to lose A LOT of cash if this merger fails and we the customers get stuck footing the bill for their legal woes. That is what seems unfair to me. I was pleased with DISH and while I would have supported the merger for the obvious benefits of more locals, etc...I never asked for it so why be forced to pay for its failure? Most likely I will still be with Dish after the rate increases, as I HATE my local cable company with a passion...but that doesn't mean I have to be happy with a rate increase. After all, if I got more channels or something so be it...but here we get nothing...NADA...Remember Charlie does not even have a plan "B", so you better believe there are no plans for new programming any time soon to make a rate increase worthwhile. That's all I meant...

[psecic]

Just drop to a cheaper package. I just dropped the Superstations & FOX Sports. That's ten bucks right there!

[TopCat99]

When I left my cableco for Dish, I was paying around $28 for 34 channels verus $40some for 150 with Dish. (It could've been around $19, but HBO--one channel of it--was $10.) And all but three channels--including HBO--were mono.

Back to the 21st century, I've sort of been expecting a rate hike. In the 2.25 years I've been with E*, I've only had it go up a dollar. How many cable companies can you say that for? That is one good thing about Big Bad Company X: a one-dollar price increase for us equates to millions for them. My cableco raised prices $1.50 (IIRC) to add GAC and some 24-hour fishing channel.

So from my perspective, Dish is still "cheap." HOWEVER, like everyone else, I DO NOT want to see rates increased again without some increase in service (more channels, more frequent/better upgrades, restoration of customer installs...). Charlie is obviously a wise business man to build Dish to what it is, but I don't think he's right in gambling with customers' money and trust(!) over the merger or any other "opportunity."

[Mike123abc]

I left my cable company when my bill went to $108 from $98 the year before. Dish everything pack is far cheaper. And even the extra dish boxes at $5 are cheaper than the $8 my TW cable co was charging. Who says cable companies are cheap in small cities? NYC TW would have been $75 for the same package.

Lets see a 600million breakup fee spread out over 8 million subscribers is about 3/month to pay it off in about 2 years...

[RichW]

This was one of the fallacies in blocking the merger - that competition between TWO DBS companioes would be good for the consumer. This might be true if it were only DBS but the real competitor is CABLE.

The result of the merger failure is that both DirecTV and Dish will raise prices to improve profits. They will both compete with cable but not as efficiently as the larger merged company would have been able to do.

[platinum]

Competition between both dbs companies is good for the consumer.

[psecic]

Originally posted by Mike123abc
I left my cable company when my bill went to $108 from $98 the year before. Dish everything pack is far cheaper. And even the extra dish boxes at $5 are cheaper than the $8 my TW cable co was charging. Who says cable companies are cheap in small cities? NYC TW would have been $75 for the same package.

Lets see a 600million breakup fee spread out over 8 million subscribers is about 3/month to pay it off in about 2 years...

AT&T Broadband has so many tiers its nuts. I'm sticking with Dish. People would be nuts to go back to cabe,, IMHO.:shrug:

[Chris Freeland]

It depends on how much of an increase and if D* does the same. If E* does raise rates significantly and D* does not, then it may be hello D* for me. I will just wait and see what happens.

[Jeff McClellan]

I would be more than willing to pay an increase, if, they restore picture quality to what it was 5 years ago.

[btbrossard]

Originally posted by JEFF M
I would be more than willing to pay an increase, if, they restore picture quality to what it was 5 years ago.
I would pay significantly more ($10+ a month) for improved PQ.

I was watching BBC America the other night and the picture was so bad I felt like I was going to be ill. I had to turn to another station.

/Benjamin

[Crazy 1]

Don't look for PQ to get better now charlie more worried about those legal fees hanging over his head.

[shilton]

Originally posted by psecic
Just drop to a cheaper package. I just dropped the Superstations & FOX Sports. That's ten bucks right there!

I thought Fox Sports comes automatically with the AT100 ot AT150 packages. Are you saying if I don't want my regional Fox Sports Channel, Dish will reduce my monthly bill??? I did not hear of this one before.

[jeffwtux]

He must be talking about the $4.99 multi-sport package. The fact is that Dish has raised their basic package price by $1 the last 3 years in a row. Not to mention the across the board rate hikes on all packages. Charlie is raising rates just as consistently as cable.

[raj2001]

Originally posted by Scott Greczkowski
And Charlie wants to compete with Cable? If rates go up you might as well call Dish Network, Cable TV from the sky.

That's why I am glad the merger never happened and is not going to. At least if one company raises rates I can go to another. If Charlie owned everything who could I go to? Cable?

[btbrossard]

Originally posted by jeffwtux
He must be talking about the $4.99 multi-sport package. The fact is that Dish has raised their basic package price by $1 the last 3 years in a row. Not to mention the across the board rate hikes on all packages. Charlie is raising rates just as consistently as cable.
At least most cable companies keep trying to better their services. We have Time Warner in most of Southeastern Wisconsin. Time Warner in Southeastern Wisconsin recently announced the start of "video on demand."

Time Warner Cable formally unveils "video on demand" today as the cable giant continues battling to keep its edge over satellite TV.
(http://www.jsonline.com/enter/tvradio/nov02/95515.asp)

They also offer HD locals for all the stations that currently offer them. Dish simply can not offer the HD locals (currently) for many, if any, cities.

Dish (and D*, for that matter) better start to understand that if they are going to act like the cable company and raise rates every year and not offer the high level of customer service they used to offer, they will continue to lose customers in areas with decent cable companies.
With a total of 425,000 subscribers, Time Warner is southeast Wisconsin's dominant non-broadcast TV service. The Milwaukee Journal Sentinel's 2002 Consumer Analysis shows that about 12% of the market has satellite, and 62% has cable.

While satellite numbers have doubled since 1999, cable held steady. Time Warner has been offering more services, including high-speed Internet access, to maintain its position Also from the JSOnline article linked above
I would be willing to bet that less than 5% of the satellite subscribers in this area are Dish customers. 95 out of 100 dishes you see in this area are D*.

Dish is going to have to listen to what the customer wants if they are going to continue to grow (and keep the customers that they have). Recently Dish seems like it does what Charlie wants, and the customers can go pound salt.

Just my 2 cents.

/Benjamin

[raj2001]

Originally posted by Crazy 1
Don't look for PQ to get better now charlie more worried about those legal fees hanging over his head.

And the $600 mil he has to pay HUGHES, plus the money required to buy PanAmSat.

Charlie gambled, Charlie lost , who pays?

[raj2001]

Originally posted by RichW
This was one of the fallacies in blocking the merger - that competition between TWO DBS companioes would be good for the consumer. This might be true if it were only DBS but the real competitor is CABLE.

The result of the merger failure is that both DirecTV and Dish will raise prices to improve profits. They will both compete with cable but not as efficiently as the larger merged company would have been able to do.

I tend to disagree here. Increases were coming any way you take it. The difference with the merger is that you would not have a choice. You got to be thankful that Charlie doesn't control everything else the rates would have been sky high!

[MikeW]

Originally posted by btbrossard


I would be willing to bet that less than 5% of the satellite subscribers in this area are Dish customers. 95 out of 100 dishes you see in this area are D*.



Not necessarily true. My brother converted from D to E several years ago. Never interested in switching to Dish 500 and still has the D dish w/E service going.

[jeffwtux]

Originally posted by raj2001


I tend to disagree here. Increases were coming any way you take it. The difference with the merger is that you would not have a choice. You got to be thankful that Charlie doesn't control everything else the rates would have been sky high!

You sound like rate hikes have been overdue for over a year. Dish just made an across the board rate hike in February. What except the merger collapse made yet another rate hike inevitable? DirecTV has by far the better brand name and the and is market leader. THE ONLY THING DISH can beat them on is price. If they lose that completely across the board, they are dead.
Of course, I don't doubt for one second that the GOP FCC and DOJ are heavily influenced by the cable lobby which knew what the consequence would be of rejecting the merger.

[Karl Foster]

Originally posted by Chris Freeland
It depends on how much of an increase and if D* does the same. If E* does raise rates significantly and D* does not, then it may be hello D* for me. I will just wait and see what happens.

FYI, my Directv bill went DOWN last February (was paying $31.99 for Total Choice, $5 for Family Pack, and $5.99 for locals - $41.98 per month total) when D* reorganized their pricing structures. I am now paying $39.99 for Total Choice Plus w/locals a savings of $2 per month for my basic service (plus some extras that didn't change in price).

Back before I had satellite, I was paying $36 for 35 stations of analog cable. What a rip!

[Bob Haller]

A merged company would ave had GREAT bargning power with the content providers... This though might be a good time to lock in your rate and save a few $ by going annual.

Certinally the merged AT&T has much greater buying power than D or E.

[Steve Mehs]

After 3 consecutive years of price increases on AT100 and HBO and last years raises on every package I was hoping that there would be a break this year.

[davidmg1]

Here in Hampton Roads VA, Cox cable just raised their rates 10%. They said that they raise rates like this every year at this time, and it's just the cost of doing business. Like it was mentioned before, at least Charlie has only raised prices $1 in the past few years.

[Bada Boom]

Maybe rabbit ears will make a comeback?

[johnsmith22]

It seems to me the economies of scale with a merged company would have very effectively kept the price down and the price charged by Cable would have effectively kept the merged company honest.

E* must be worried about churn to D* so I can´t see them pricing themselves out of the market by charging much more than D*, that would be suicide.

If E* goes up I would put my money on a D* increase as well, the increases still keeping them competative with cable.

[BrettR]

Originally posted by jeffwtux
Charlie is raising rates just as consistently as cable.

Cable rate increases are much worse. Usually $2 per year per package! HBO is $17/mo here on Comcast. That only includes 3 channels.

With digital packaging, the cost of getting the HBO plex is considerably less but that requires a digital basic subscription which starts at about $55 (includes digital converter).

[markh]

Whoa, guys. He didn't announce a price increase. All he said in the article I saw was that without a merger prices would increase faster than with a merger. It was more pro merger talk, not a price increase.

[RichW]

"Competition between both dbs companies is good for the consumer."

Perhaps, but price will not be one of those factors in that competition.

There is plenty of historical evidence that a "duopoly" is not much better for consumer prices than a monopoly. De facto "price fixing" is a way of life when the number of suppliers is limited and the cost of the product sold by each supplier is relatively the same. An increase in price by one supplier signals an OK for the other to do the same. The need for any illegal pricng collusion goes away when you have only one competitor.

DirecTV has already stated that their current and future strategy is to increase profitability, not to buy market share. There was one document I read about three months ago which said that they were even willing to give up more market share and, instead, concentrate on higher tier customers.


Intense competition in DBS was necessary for each company to establish a market share to a point they could make profits. The exciting days for DBS innovation are over. DBS looks more "like cable" because DBS growth has leveled off and the number of new things in the industry are being limited by external forces such as lack of more bandwidth and efforts by program providers to limit ability of digital devices like PVRs for fear of copyright violations.

From now on it will be "just TV".

[dmodemd]

Pay the ANNUAL renewal rate and lock in your price now!

[jeffcarp]

Originally posted by shilton
Read an article today on Yahoo's Financial pages that in a recent interview, Charlie says he is "Still focused on getting the merger to go through even though it is an uphill climb". He further says there is no "Plan B" if the merger fails but if the merger does indeed falter, rate increases for Dish Subscribers will be an absolute certainty. What the heck...they gamble on the merger and when it falls apart, we are stuck footing the bills!!! I thought Charlie was so very big on keeping costs down compared to the cable giants. My bill is gettin' right up there with what it was when I had cable. Pretty soon, Echostar will charge just as much as DirecTV and the only reason I chose E in the first place was because I could get the same programming for less money!
I will be keeping my eyes on this one.
These comments come from Echostar's 3rd quarter conference call yesterday. I listened to it live. First, concerning rates going up being "an absolute certainty," that is completely false. Those words did NOT come out of his mouth. He said it was no secret that rates may have to go up. Secondly, the reasons for the rates going up were discussed at length. The reason is because the 2 companies separately will not have the negotiating power with the content companies that they could have had together. Therefore, rates will go up because they will have to pass the programming cost increases onto consumers. Like everything in life, you've got to know the context of his comments before you pass judgment.

[jeffcarp]

Originally posted by shilton
Wait...please let me clarify my earlier statement. I did not mean to imply that TODAY price is the only factor for me, but of course price does matter somewhat. But, at the time I picked DISH, they were quite a bit less than DirecTv and given the fact that the packages I was interested in were very similar, I chose Dish. That was about 4-5 years ago. Since then, I have dealt with customer service and my hat is off to them, as they have always treated me well. Still, in my area, a Digital Cable package comparable to Dish's AT150, plus Multi-tiered HBO is almost the same price I pay now for Dish. I know prices will rise at times, but seems to me that this increase is the sole result of the fact that Dish will stand to lose A LOT of cash if this merger fails and we the customers get stuck footing the bill for their legal woes. That is what seems unfair to me. I was pleased with DISH and while I would have supported the merger for the obvious benefits of more locals, etc...I never asked for it so why be forced to pay for its failure? Most likely I will still be with Dish after the rate increases, as I HATE my local cable company with a passion...but that doesn't mean I have to be happy with a rate increase. After all, if I got more channels or something so be it...but here we get nothing...NADA...Remember Charlie does not even have a plan "B", so you better believe there are no plans for new programming any time soon to make a rate increase worthwhile. That's all I meant...
You are just getting sucked right into all of this second hand information. The potential rate increases were discussed in the context that they could have been avoided in a merged company because of future negotiating power. It is a ridiculous assertion to say Echostar has no plan B. HE said they didn't but it is obviously a tongue-in-cheek comment. He even stated that his competition listens in on the earnings conference calls, so do you think he is going to lay his business plan on the table for the public to see it? Give me a break. Echostar will never buy Pan-Am or pay Directv in my opinion when the merger fails. They will use provisions in the contract to avoid that. But he has to publicly be 100% committed to the merger up until Directv's walk-away date. Then he can use the fact that Directv walked away, and publicly said they would 2 months before, against them to avoid paying the break-up fee. Echostar has a Plan B, no question. Come February, when Directv walks away, we will all hear Plan B and I would be willing to bet it will please everyone that hears it.

[jeffcarp]

Originally posted by TopCat99
So from my perspective, Dish is still "cheap." HOWEVER, like everyone else, I DO NOT want to see rates increased again without some increase in service (more channels, more frequent/better upgrades, restoration of customer installs...). Charlie is obviously a wise business man to build Dish to what it is, but I don't think he's right in gambling with customers' money and trust(!) over the merger or any other "opportunity."
So when the content companies increase their rates 15% for the same content, is Dish just supposed to eat that? No - they pass it on. It is called inflation. When your health insurance premiums go up, do you get better health coverage in return?

[jeffcarp]

Originally posted by raj2001


And the $600 mil he has to pay HUGHES, plus the money required to buy PanAmSat.

Charlie gambled, Charlie lost , who pays?
Unless you've read the contract, it is ridiculous to speak this kind of nonsense like it is a fact. There are conditions in the contract where Hughes pays Echostar. I would be willing to bet that the above does NOT happen, given a failed merger.

[DarrellP]

Maybe rabbit ears will make a comeback?
Yes! It's called Off Air Digital in High Definition, and it's FREE! I get as much HD off the air as Dish broadcasts via satellite. (at least until they pickup ESPN & HDNET).

[lee635]

If two DBS providers are better, why not break up Wal-Mart too? That would drive down prices, right?

I agree with RichW. Duopoly is the worst of both worlds, overbuilt and duplicated cost structures with limited and anemic market competitive structures.

[Chris Freeland]

I would not be surprised to see E* increase the price on AT50 the most. D* no longers offers SC to new subs and cable can not touch AT50 anywhere, so E* has more room to raise the price of AT50 to perhaps $24.99 and still be cheaper then the competition. E* does not have much wiggle room with AT100 or AT150, the D* price for TC is already the same as AT100 and is a better value at that price, if you do not count the PI channels and only count the popular cable nets, D* TC has 4 or 5 more of these channels then E*. AT150 is already more expensive then TC+, however AT150 includes the Encore theme, TMC and TMC-Xtra West channels along with the Golf channel, FSW and Outdoor channel that require premium package add-onns to receive them with TC+, it is hard to determine weather TC+ or AT150 is the better value, it depends on the individual. Unless D* also raises prices sometime next year, E* does not have much wiggle room with AT100 or AT150, if you compare these prices with digital cable, E* might have some room but if E* raises rates and D* does not, anyone considering switching from digital cable will see lower D* prices and go with the better known brand. Unfortunately because the merger is not going to happen, both D* and E* will have less bargaining power with program providers which mean their will be more price increases then their would have had if the merger would have bean approved, plus the combined DBS company would have had the bandwidth to have competed with cable with a compatibly priced broadband option which would have added to the revenue stream and would have bean able to have added more locals to better compete in a 210 dma's not just the 60-70 that they will be able to compete in without the merger.

[raj2001]

Originally posted by jeffcarp

Unless you've read the contract, it is ridiculous to speak this kind of nonsense like it is a fact. There are conditions in the contract where Hughes pays Echostar. I would be willing to bet that the above does NOT happen, given a failed merger.

The deal DOES say that Echostar has to pay Hughes 600 million if the deal fails to gain regulatory approval by January. I have not seen the contract, but that is what every reliable source is saying. It is entirely possible that Charlie could fight this in court though, and very well worm his way out of a $600M hit.

[raj2001]

Originally posted by lee635
If two DBS providers are better, why not break up Wal-Mart too? That would drive down prices, right?


Wal Mart and Echostar are two entirely different scenarios. First of all, there can be dozens of competitors to Wal-Mart. With a merged DirecTV and Echostar, the only competition left would be cable, and to a lesser extent C-Band. Furthermore, Wal-Mart does not take all of the physical resources and land space available for stores.

DirecTV-Echostar does take up all US DBS frequency allocations and satellite slots, however. If the merged DirecTV-Echostar were either Government owned or owned by several companies I wouldn't mind this. But to give one company (Echostar) and one man (Ergen) all that exclusive power is asking for trouble.

[Mark Holtz]

Originally posted by raj2001
The deal DOES say that Echostar has to pay Hughes 600 million if the deal fails to gain regulatory approval by January. I have not seen the contract, but that is what every reliable source is saying. It is entirely possible that Charlie could fight this in court though, and very well worm his way out of a $600M hit.

Not necessarily. There was talk that some DirecTV execs were going to try to purchase DirecTV. If this is true, then there is a out clause that effectively gives up $300 million. Also, if GM doesn't provide 100% effort in making this merger work, then GM gets nothing.

People have been wondering why there isn't a plan B. Simple-if Charlie talks about a plan B, then he's out $600 million. GM has set the deadline for January 21st. And GM needs the money from the sale of DirecTV to help their pension fund.