Rising Costs May Price Viewers Out of DirecTV: CEO
Special to CNBC.com
DirecTV is facing higher content costs and intense price competition for viewers, Chief Executive Michael White told CNBC Thursday, and at some point he will have to pass along those costs to his customers, already stretched in the current economy.
"The bigger problem for consumers in this economy is the rising content costs are at a rate that I don’t think the average American household can handle, he said. "Our content costs are growing high-single-digits, double-digits. I can’t price at those levels."
With both broadcasting networks and cable companies charging more for what DirecTV broadcasts over its satellite, at some point "the consumer has to pay," White said. "There’s no free lunch. At some point all of this comes back to the consumer’s budget."
DirecTV is hoping its programming and service will keep satellite customers from switching to cable or broadband service.
As for competiting satellite company Dish Network , White would not comment on whether there would be another attempt to merge the two companies.
However, he noted that the "last time this came up with the government it was unanimously rejected and that was with a Republican administration," he said. "It’s a pretty tough hill to climb."
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