Service prices are climbing to "reflect the cost to deliver content to our customers," AT&T said in a statement to Engadget. It's not clear if this reflects higher channel carriage rates, AT&T's infrastructure costs or a combination of both.
A price increase seemed likely regardless of those costs. The carrier is focused more on making AT&T TV Now profitable than on racking up subscribers, and it's been losing subscribers in recent months -- 168,000 just in the second quarter of this year. A rate increase theoretically makes up for that loss. As you might guess, though, this also risks alienating subscribers who balk at the new prices and don't care for AT&T's particular channel offerings. Rivals are raising prices as well, but the gap could be large enough now that viewers might be tempted to switch.