DirecTv announced it is raising rates by $2 on all of its programming packages for new subscribers beginning May 25.
The company said the existing 8.2 million DirecTv and Primestar by DirecTv subscribers will not be assessed the higher rate.
DirecTv said the higher prices for new subscribers are necessary to balance higher programming costs the DBS system has been asked to pay — the company said it has been given price increases for many of the networks and services it offers — and for investments it has made to expand service and upgrade its operations.
“This price increase is significantly lower than price increases implemented by cable operators over the last several years,” said Bill Casamo, DirecTv executive VP. “Even with this modest price increase, DirecTv continues to offer the best value in multichannel television.”
Prices for pay-per-view movies, local channel packages and a la carte premium movie channels remain unchanged, DirecTv said.
The satellite provider said its programming costs have risen more than 35% since 1997.
“With the addition of its second broadcast center, the launch of its fifth high-power satellite, and the opening of six permanent new customer call centers in the past year, DirecTv’s costs have also risen in areas such as broadcast operations and customer service,” according to a company statement.
“This year, and in the years to come,” Casamo said, “we will continue to aggressively expand our service offerings with the introduction of new channels and the launch of compelling new interactive and enhanced TV services.”
Since 1997, DirecTv has added 29 new channels to its programming lineup, he said, and last year it expanded satellite capacity to offer more channels and entertainment options, including local channels in 23 markets and high-definition programming.
In related news, DirecTv said it has started a new direct-sales initiative that will enable prospective customers to purchase a DirecTv system and arrange for professional installation via phone, using the toll-free 1-800-DIRECTV number.
“We’re responding to customer interest in ordering DirecTv equipment via phone,” said Scott Nordhaus, sales and distribution senior VP. “Consumers who do not have the access or opportunity to purchase from retail will now have another option to bring the DirecTv service into the home.”
The direct-sales feature will include the full line of DirecTv products available in the marketplace. New customers who use the direct-sales channel will also have access to the same national promotions introduced by DirecTv at retail. Fulfillment will be handled by DirecTv Home Services, a network of professional installers and providers.
In other announcements, the satellite provider said it will add the Oxygen network to its programming lineup this spring. However, it was still determining which package the channel would be added to and could not give distribution specifics.
Oxygen is a new programming network launched by a team that includes Oprah Winfrey, with Gerry Laybourne, Marcy Carsey, Caryn Mandabach and Tom Werner. The network is developing programming targeted to women through a platform of video and 13 related websites.
Along with its video service, Oxygen will offer Wink-enhanced television data. The two-way text and graphics service will be available to DirecTv subscribers who have purchased certain newer DirecTv decoder boxes.