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Sky raises its prices following record £4.2bn Premier League win

Sky customers should expect an unwelcome letter over the next few weeks, as the UK broadcaster is set to increase the price of its TV packages.

The increase is likely to be the result of the record price paid for Premier League football rights, after Sky agreed a fee of £4.2 billion just over a month ago.

Read more: Sky On Demand had a record-breaking year in 2014

Traditionally, Sky increases its prices in September, so the unexpected hike is likely to be caused by the astonishing valuation of English football.

On average, Sky’s prices will increase by £2.50 a month, with the “Variety” bundle increasing by £2, the “Family” bundle by £3 and the “Sports” package going up by £1. The “Original” bundle, which is Sky’s cheapest offering, will remain at the same price.

The price increases will come into effect on 1 June, with existing customers set to be informed by letter over the coming weeks. It remains to be seen how customers will react to the news, but many are likely to be displeased considering that price increases are seemingly a regular occurrence.

According to the Financial Times, Sky Sports customers saw a six per cent increase as recently as last September. In total, the cost of Sky’s “Sports” package has increase by approximately 30 per cent above inflation since 2001.

Although the price increases are to be expected, especially with industry experts believing that Sky makes a loss on its Sports channels, the broadcaster will be concerned that it may tempt some customers to leave.

Despite the company dominating the pay-TV landscape in the UK for many years, it has come under threat from new TV firms operating a vastly different business model. The likes of Netflix, Amazon Prime Instant and other streaming services have changed the TV-landscape markedly.

Read more: Vodafone takes on Sky and BT with pay-TV launch

Aside from online services, Sky must now contest with BT Sport, which has made a concerted effort to win football rights from the Rupert Murdoch-owned company. This heightened competition resulted in Sky bidding £300 million a year more than predicted for the Premier League rights.

Barclay has been writing about technology for a decade, starting out as a freelancer with IT Pro Portal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.