Charter Communications is quietly raising the rates for some of its services for the second time in less than six months.

A Charter rep (largely) confirmed a Reddit posting from earlier this week — from an individual claiming to be a Charter employee — stating that base internet pricing will rise in July by $3 a month, with the base-level Spectrum TV Select package also going up by $3 in some states. 

Here’s the post:

Rate increases incoming again July. from r/Spectrum

Also Read: Comcast and Charter Are in a Better Position Than Smaller Cable Companies To Resist Fixed Wireless Competition, S&P Global Ratings Says

Charter did say the changes to its TV Select service will impact “less than 1%” of residential video customers. And CableCard pricing is going up by $4 a month, not $6. (We were surprised CableCARD is still a thing, too, with Charter ending support for the technology two years ago.)

The increases don’t appear to impact Spectrum Mobile.

“Spectrum has worked with programming providers to create a new business model that provides our video customers with more choices to fit their needs and a better value for the products they purchase,” reads a statement emailed to Next TV. “Despite these ongoing efforts, some programmers continually raise fees for their content, which are passed through as increased fees to viewers and drive higher costs across the entire industry.”

The increase comes following an earlier price hike in January, when the company raised rates for its low-income-targeted Spectrum Internet Assist service from $20 to $25 a month.

Last July, Spectrum raised the price of its TV, internet and phone services, again citing programming costs for the increase.

The news also comes after Charter’s first-quarter earnings report revealed that Spectrum lost 72,000 internet customers and 405,000 cable TV customers in the first three months of 2022.

Perhaps more relevant: Broadband average revenue per customer (ARPU) came in at $68.12  in the first quarter first equity analysts' consensus forecasts of $68.60. 

“We continue to expand and improve our offerings to ensure all customers have products and packages that best meet their needs,” the Charter rep added. “While our services have been impacted by rising costs, we strive to keep prices as low as possible.”

Charter is still in the process of notifying its customers of the price increases.

Broadband customer growth for the biggest U.S. cable companies has suddenly stopped, while T-Mobile and Verizon just added nearly 1 million to the ranks of fixed wireless access (FWA) subscribers, who are paying in many cases nearly 40% less each month for home internet. 

That won't stop Charter Communications from jacking up the monthly broadband bill for its internet-only customers by $5 a month. 

The nation's No. 2 cable operator referenced a price hike during its third-quarter earnings call back on Oct. 28. And it confirmed last week that affected Spectrum Internet customers would start seeing the price increase on their monthly bills starting Nov. 1. Analysts estimate that nearly a third of Charter's 30.3 million high-speed-internet customers will be impacted. 

Next TV wasn't notified at our Los Angeles nerve center by Charter, but we did notice that our 300 Mbps service spiked in price this week from $74.99 a month to $79.99. The 500 Mbps service will now cost $99.99 a month, and Charter's 1-gig tier will increase to $119.99.

Charter's last major price increase came at the end of 2020. The cable company is simultaneously introducing a new bundled tier, Spectrum One, which packages 300 Mbps internet service with Charter's Advanced Wi-Fi product, as well as Spectrum Mobile service, at a 12-month promotional rate of $49.99 a month. The price will increase to around $85 a month after that one-year promo period.

Will that promotion soften the blowback for Charter?

Again, our wireless carrier, T-Mobile, is offering its 5G Home Internet FWA service for $50 a month. The cable industry is aggressively messaging about its network performance superiority, but a 40% savings has to be seriously pondered. 

Charter added 61,000 high-speed internet customers in the third quarter after reporting a subscriber loss of 21,000 in Q2. The cable operator added 537,000 and 265,000 customers in the third quarters of 2020 and 2021, respectively, so you get an idea of home much customer growth for its core connectivity service is slowing. 

Charter's share price is down over 43% since the beginning of 2022, as well. 

Charter is, however, at the beginning of a major investment cycle in its next network upgrade, with plans to transition to DOCSIS 4.0 and Distributed Access Architecture virtualization. ■

Many Verizon Wireless customers have been infuriated this week after receiving notification from the telecom that their monthly bill for data will go up as much as $12 due to “rising operational costs.” 

Of course, price increases are part of the telecom business shell game, but they typically heat the proverbial waters around the ol‘ lobster by marginal increments — such as the $1.35 “economic adjustment” fee increase applied by Verizon this month to its postpaid customers for “administrative cost” increases. 

But consumers will definitely feel 12 bucks.

Verizon’s move follows a very similar price bump announced earlier this month by AT&T — single-line-of-service customers got a $6-a-month increase, while AT&T shared data customers saw a monthly surge of $12.

Verizon said its increase will take effect “no sooner” than August 2.

Verizon CEO Hans Vestberg raised the possibility of such a price bump during his company's first-quarter earnings report, suggesting something simply had to be done to keep up with inflationary pressure. (He didn't mention any adjustments to his own executive compensation, which exceeded $20 million last year.)

Thanks, Obama?

Blaming the current administration for inflation has been a go-to messaging point for far-right media outlets as they propagandize for the November midterm elections. And that agenda seems to be catching on, based on President Joe Biden’s currently low approval ratings. But increasingly, it appears that corporate greed might be a principal driver for the current upward price pressure we're all experiencing.

A study by the Economic Policy Institute published in April found that more than half of the overall increase in consumer pricing can be attributed to initiatives intended to drive “fatter corporate profits.” ▪️

Announced by Disney back in early December at its big investor day presentation, Disney Plus’ first price hike arrives Friday, March 26.

The standalone subscription Disney Plus service will increases in price from $6.99 to $7.99 a month in the U.S.. The year-long commitment price will go to $79.99 from $69.99. And the price of a bundle that includes Disney Plus, basic Hulu and ESPN Plus will rise $1 to $13.99.

At its 2019 Direct-to-Consumer investor day, Disney said it expected content spending to grow from $2 billion in 2020 to $4 billion in 2024. Now, the company expects content spending for Disney Plus to spike to between $8 billion to $9 billion over the next three years.

Two weeks ago, Disney announced that Disney Plus had exceeded 100 million subscribers worldwide in just 16 months on the market. 

But the service’s low price point is gaining notice by competitors. For example, at his parent company’s investor day event two weeks ago, WarnerMedia chief Jason Kilar made a point of reassuring investors that it’s HBO Max that’s actually second to Netflix among major subscription streaming services in terms of revenue generation. 

Sling TV has upped the price of its two base tiers, Orange and Blue, by $5 a month to $35 for new customers.

The price of add-on packages is going up, too—the Sports Extra bundle has spiked a dollar a month to $11.

Existing customers will not experience a price increase until July 2021, thanks to the no-price-increase-for-one-year decree made by Dish Network-owned Sling TV last summer.

As all virtual pay TV services do when they inevitably up their prices, Sling TV blamed the bump on fast-growing program licensing costs.

"Unfortunately, we are forced to raise prices because the television networks keep charging us more, but we fight hard to get the best deal for our customers,” said Michael Schwimmer, group president of Sling TV, in a statement. “The proof of our commitment is apparent, as Sling TV is still the best deal in the market, keeping our prices much lower than cable and other live streaming services.”

Sling TV is notably bereft of access to CBS and ABC local stations, and it has been aggressive in pushing its users to get their locals from over-the-air sources. 

At $35 a month, the service is still cheaper than Hulu + Live TV and YouTube TV, the two virtual MVPDs that have surpassed the seminal Sling TV service in users. 

At last count, the end of the third quarter, Sling TV had just under 2.5 million subscribers, having added 203,000 users in Q3.

The service did beef up its DVR offering—it now gives new users 50 hours of HD recording vs. only 10 previously. The $5-a-month DVR add-on, meanwhile, now delivers 200 hours of recording vs. 50.

Comcast is getting ready for significant prices increases across its internet and TV/video product lines on Jan. 1.

In a memo circulating on Reddit, first reported on by Ars Technica, and since confirmed by the top U.S. cable operator, subscribers to Xfinity-branded services national-wide will see their monthly bill go up.

Notably, the customer note circulating on Reddit is for Chicago area customers. Here’s what they’re also getting when they wake up on the first day of 2021:

High-speed internet services will see $3-a-month price spikes across tiers. And TV bundles are too—Choice TV, for example, is going up from $25 a month to $30.

But perhaps the most insidious hikes are coming in the areas of hidden fees, which vary from region to region. The “broadcast TV” fee, which isn’t included in the list price of Xfinity services, even those in promotional pricing windows, is going up significantly, as much as $4.50 a month in some areas. That’s what’s happening in Chicago, where the fee that’s ostensibly meant to offset broadcast retransmission pricing increases from stations is rising from $11.70 to $16.20.

Also read: Comcast Expands 1.2TB Data Cap to Full Footprint

Happier news: the fee for Chicago subscribers to cable up a secondary TV is going down from $9.95 a month to $7.50.

The Chicago Comcast pricing list doesn’t mention increases to regional sports network fees, but they seem to be part of the mix in other regions. 

In a statement to Ars, Comcast explained its rationale this way: “Rising programming costs—most notably for broadcast TV and sports—continue to be the biggest factors driving price increases for all content distributors and their customers, not just Comcast. We're continuing to work hard to manage these costs for our customers while investing in our network to provide the best, most reliable broadband service in the country and the flexibility to choose our industry-leading video platform with X1 or the highest quality streaming product with Flex, the only free streaming TV device with voice remote that's included with broadband service.”

Netflix will raise rates on its most expensive and popular tiers in the U.S. beginning Thursday, the company announced, though it will leave its least-expensive tier at $9 a month. 

The company’s premium tier will jump to $18 a month, up $2. The most popular tier, the company’s standard plan, will rise a dollar, to $14 a month, the company said. 

Analysts expected the move. In a note to investors in September, Jefferies analyst Brent Thill said a hike is “probable in the near- to mid-term.”

Also read: Netflix Price Hike ‘Probable in the Near- to Mid-term,’ Analyst Says

The changes were foreshadowed in the company’s earnings call earlier this month, when co-CEO Reed Hastings and other executives responded to analyst questions by saying they anticipated hikes in various markets that would be re-invested in additional content acquisition and production in what they termed a “virtuous cycle” that increased customer satisfaction and acquisition, and reduced churn. 

The company will “occasionally go back and ask [customers] to pay a little bit more to keep that virtuous cycle of investment and value creation going,” Netflix COO and Chief Product Officer Greg Peters said during the earnings call.  

The latest hikes are the first in nearly two years in the U.S. Some Canadian plans were bumped up earlier this year, but a company spokesperson told The Verge that the U.S. increase “does not influence or indicate a global price change.”

The increase comes the same day as Comcast announced quarterly earnings that included the announcement that its hybrid AVOD/SVOD service Peacock now has nearly 22 million subscribers, up from 10 million in Q2, when it had a limited launch on Comcast-owned pay TV services. 

Netflix, by comparison, has more than 195 million subscribers globally, adding more in the first three quarters of 2020 than it did in all of 2019 thanks to pandemic-fueled programming demand. 

Even with the increase, Netflix remains cheaper than HBO Max, which launched this spring at the same $15-a-month price as its pay-TV premium channel namesake. Other newcomers remain significantly cheaper, but with far less new original programming, thanks to pandemic curbs on production of new shows that many of the services had planned. 

The pandemic also caused halts in Netflix production in many parts of the world, but that also  helped the company book what’s expected to be $2 billion in positive free cash flow this year, Netflix said, though it expects to revert to negative free cash flow next year as production resumes on more than 200 series and feature-length projects. 

The company is projected to spend more than $18 billion this year on programming from around the world, and more than that next year.

If Netflix increases its monthly subscription price by $1, 8% of surveyed broadband users told OTT research company The Diffusion Group (TDG) that they’d quit the streaming service.

Another 8% said they’d downgrade to lower service tier.

This notable information came from a survey of 1,940 adult U.S. broadband users conducted by TDG in December, about a month before Netflix announced actual across-the-board price increases of $1 - $2 a month.

Related: Netflix Raises Prices as Consumer Subscription Spending on OTT Tightens

The subsequent TDG report, “Quantum Viewing Behavior,” didn’t indicate how many of the 1,940 polled subscribe to Netflix.

Earlier this week, Netflix announced that it was upping the monthly price of its base one-stream, standard-definition package from $7.99 to $8.99; the $11.99 two-stream HD package is going up to $13.99 a month; and four-stream 4K/HDR high-end tier, formerly $13.99, is spiking to $15.99.

While it had foresight to see Netflix’s price increase coming, and poll consumers on it, TDG did not as its sample what a $2-a-month hike might convince them to do. However, TDG said that a $3 rise caused 16% of its polling sample to say it would quit Netflix; another 22% said they’d downgrade service with a $3 monthly spike. Similarly, a $5-a-month increase would disrupt 47% of the base, with 22% heading for the exits.

Netflix has just over 58 million users in the U.S. and will report its fourth quarter earnings Thursday. Investors lauded the streaming service with a 6.5% stock price increase in the immediate aftermath of the announcement on Tuesday. However, executives in the streaming industry have noted that consumers might be reaching a limit in terms of how many monthly video streaming bills they can pay. 

"While TDG believes that Netflix will endure any short-term backlash from these increases, it is undoubtedly reaching a level of price resistance across all tiers," said Michael Greeson, president of TDG, in a statement. "At an average increase of $3 per month, 33% of Standard tier subscribers are likely (though not certain) to downgrade to a less expensive plan and 10% are likely to cancel the service altogether, compared with 28% and 6% of Premium tier subscribers, respectively. These variances are not insignificant."”

A two-year grace period that shielded veteran Netflix subscribers from a 2014 price increase expires next month, an event some think could cause the subscription VOD pioneer to actually subtract customers during the second quarter of 2016.

The May switchover could be tricky: It’s the biggest price increase since 2011, when the company announced a rate hike for its streaming/mail-order DVD combination from $9.99 to $15.99 per month. Back them the backlash was swift — Netflix stock fell 40%, and customers called for Netflix CEO Reed Hastings to resign.

This time around, the company has been careful, buying itself time in the two-year wait for the initial outrage to wane. And analysts point out that customers intent on keeping the $7.99 price point can do so by dialing back their tier of service to the single-stream, standard- definition Basic Plan.

The pricing details: Netflix hiked the monthly fee for new customers in May 2014 to $9.99, but allowed existing customers at the time to remain at the previous $7.99 and $8.99 monthly rates for two years.

UBS media analyst Doug Mitchelson estimates about 17.8 million Netflix customers in the U.S. (37% of its total base) were at the $7.99 price point. He thinks the $2-permonth increase will be too high for between 3% and 4% of those customers, who will probably cancel service.

‘U.S. MATURITY FEARS’

Netflix is offering those grandfathered customers an opportunity to stay at the $7.99 rate, but they would have to downgrade service to one streaming device in standard definition, as opposed to two streaming devices in HD. While that could offset some of the cost-conscious churn, it isn’t expected to be much.

The churn from the grandfathered base amounts to about half of Netflix’s quarterly subscriber gains; in the fourth quarter it added about 1.5 million U.S. customers. Couple that with a maturing market — subscriber growth has softened in recent periods — and Netflix could be heading into its first negative streaming quarter ever.

“Investor concerns regarding the potential churn from such a large price increase are compounding the U.S. maturity fears already plaguing Netflix’s stock,” Mitchelson wrote. “Add in the fact that 2Q is the seasonally softest quarter, and some investors are even questioning whether Netflix will have its first quarter ever of declining U.S. streaming subscribers.”

In the past several quarters, Netflix has seen a steady softening of domestic subscriber additions, from 2.3 million adds in Q4 2013 to 1.5 million in Q4 2015. Most analysts who follow the company aren’t expecting the worst, but anticipate that the slower growth trend will continue.

Morgan Stanley media analyst Ben Swinburne revised his Q1 subscriber estimate downward to 1.8 million from 2.2 million after the SVOD pioneer missed his Q4 estimates.

“When you have as large of a subscriber base as Netflix, minor changes in churn can have a material effect on net subscriber additions,” Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak said. “I would be surprised if it goes negative even with negative 2Q seasonality, but you cannot completely rule it out. I figure they can do at least a couple hundred thousand.”

Mitchelson said in his report that the bear case for Netflix to lose subscribers in Q2 is unlikely, and he estimated the company would end the period with an increase of about 450,000 customers in the U.S.

Of the customers paying the old $7.99 monthly rate, Mitchelson estimated that 229,000 would churn off in Q2, with another 360,000 dropping the service in Q3.

Swinburne was a little less optimistic. He estimated that total additions would be about 150,000 and paid customer additions would be flat in the second quarter.

Fueling Mitchelson’s optimism is Netflix’s programming lineup. The company, the analyst wrote, has a strong original content slate with hit shows like Orange Is the New Black, Jessica Jones and Daredevil.

This year is expected to be especially strong — Netflix is increasing its original scripted series slate to 31 in 2016 from 16 in 2015 with shows like The Crown, Marvel’s Luke Cage, Frontier and The Ranch and has 10 feature films released or in production.

“We feel comfortable the slate supports our view for low levels of churn,” Mitchelson wrote in a report.

GROWTH MARKET: THE WORLD

While domestic growth is slowing, Netflix’s real opportunity is international, Mitchelson said. UBS estimates that the U.S., which represented 60% of total gross customer additions in 2014, will shrink to 38% by the end of 2016. Taking up the slack will be areas like Latin America, Europe and Australia.

Swinburne, also in a research note, figured international subscriber additions would rise to 3 million in the second quarter (from 2.4 million last year), with full-year additions at 15 million — 28% higher than the 11.75 million added in 2015 and outpacing his estimates for 4.1 million domestic additions in 2016.

Swinburne said he thinks international streaming customers will overtake their domestic counterparts in 2017, with 54.6 million subscribers (compared with 52.6 million domestically), reaching nearly 80 million customers by 2020. Domestic subscribers could reach 60 million in 2020 by his figures.

Wlodarczak added that, while international growth is important, so is stable U.S. growth, which validates Netflix’s increasing its original programming spend.