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Small Price Increase at DISH, Big Jump in HDTV Costs

26 января 2007
Just before the turn of the new year, EchoStar Communications announced price increases across most of DISH Network's programming tiers. Not only are the satcaster's price hikes smaller than in previous years, some researchers have noted that the jumps are also significantly less than those of competing cable operators.

According to Bernstein Research's Craig Moffett, the average price increase across DISH's tiers settled at about 4 percent, whereas years prior the company bumped its rates closer to 6 percent. "The price increases come at a time when EchoStar's overall revenue growth is increasingly dependent of ARPU growth, with subscriber growth contributing less than ever before to total revenue growth," he said. "In the most recent quarter, for example, ARPU growth accounted for 50 percent of total growth for the first time."

But while these costs have slightly curbed, EchoStar has "standardized - and in some cases sharply increased - its HDTV pricing," the analyst said. According to the firm's research, the addition of HDTV will now be a flat $20 per month, over and above the basic price of other packages. "That compares to approximately $10 per month for most cable operators (some, like Cablevision, offer HDTV for no incremental charge), and $9.99 at DIRECTV."

Despite EchoStar currently offering more national HD programming than any other provider, Moffett said the increase puts the company at a sizable distance from its competitors.

"Satellite operators are at a significant cost disadvantage versus cable in offering HDTV (because of the cost of additional/replacement rooftop equipment, in addition to HDTV set-top boxes)," he said. "While charging more could help recoup higher costs, it could also discourage customers from upgrading, potentially driving them to cable."



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