NEW YORK (Reuters) - New York-based cable operator Cablevision Systems Corp said on Friday it will raise the price of its average video package by 4.7 percent in 2008 due to increases in programming costs.
While the increase is above the 3.6 percent U.S. inflation rate so far this year, Cablevision said programming fees charged by television networks have risen nearly 13 percent.
Cablevision, which has 3.1 million subscribers, said the new prices will take effect in December and January.
It said standard pricing for its high-speed Internet and digital phone services would remain unchanged in 2008.
Cablevision is competing aggressively for subscribers with telephone operator Verizon Communications Inc, as well as digital satellite TV providers such as DirecTV Group Inc and EchoStar Communications Corp.
Verizon has invested billions of dollars in rolling out its own fiber optic-based digital video service called FiOS. It said FiOS has TV subscribers in more than 130 communities in the New York region.
In January, Verizon lifted the monthly subscription fee for the FiOS Premier TV service by 7.5 percent to $42.99. It has not said whether prices will change in 2008.
According to Cablevision’s Web site, the basic Family Cable package from Cablevision is about $47 per month, depending on the subscriber’s location.
Cable and telephone companies compete for subscribers with attractively priced packages of video, phone and Internet services, usually called “triple play.”
The Dolan family, which failed in their bid to buy out Cablevision on Wednesday, had cited growing rivalry from Verizon as one of the reasons to go private in order to better compete. The Dolans have a controlling stake in Cablevision.
Last year, Verizon increased the price of its video packages by over 7 percent for 2007, while Cablevision increased its video price packages by 1.1 percent.
Verizon spokesman Eric Rabe declined to comment on the company’s pricing strategy for 2008, but said: “I don’t think we have plans to have an automatic annual increase as cable has done for so many years.”
Reporting by Yinka Adegoke and Ritsuko Ando