Recently YouTube TV raised its cost to $72.99 a month and blamed the rising cost of content. YouTube TV is not alone in this almost every major live TV service has been forced to raise its costs due to the higher cost of content. Now thanks to S&P Global Market Intelligence, we get an idea of what these costs are.
In 2023 the cost of your local TV station went up by 3%. In total local TV fees for your local ABC, CBS, FOX, and NBC now total $14.83 billion across the industry. The bad news doesn’t stop there, as it is reported that by 2027 retransmission fees will grow to $15.93 billion. Because of that, over the next few years, streaming services and cable TV companies need to find over a billion extra dollars just to pay for local TV stations.
These costs are why Sling TV, for the most part, has avoided carrying locals to help keep their costs lower.
“Although traditional multichannel churn outpaced virtual subscriber gains in 2022, increases in average per-subscriber rates in renewals and annual step-ups kept gross retransmission revenues growing, albeit at a much slower pace than years prior,” said Justin Nielson, principal analyst at S&P Global Market Intelligence according to NextTV.
This is just the cost of local TV stations and major networks, especially news, sports, and other channels that offer live events, which have been driving up their costs also. Most of these contracts also include automatic yearly price hikes that explain why both cable TV and streaming services have to raise their fees every year.
Services like Fubo, Hulu, Vidgo, and more are all experiencing the same issue. They need these channels to attract subscribers, but raising their price to afford them may force some subscribers to cancel their subscriptions. This balancing game has no answer as live TV streaming services and cable TV companies struggle to find a balance.