Why Streaming Prices Rose by 23% Last Year
By Movieguide® Contributor
The business strategy for streamers has significantly shifted in the last year. While these platforms now fight to make a profit, consumers have noticed the constant price hikes.
The average cost for streaming services rose by 23% last year. Nearly every streaming platform raised its monthly subscription cost by three or more dollars, a change that has many consumers reconsidering their subscriptions.
Last November, Disney+ received massive backlash after announcing a price hike, and “Cancel Disney Plus” trended across social media as millions of Americans realized the service may not be worth the price. While not every platform has faced significant backlash, the rising costs are beginning to weigh on consumers.
The industry as a whole also saw a significant price point reached last August, when the cost to subscribe to the major streaming services topped the price for a basic cable plan for the first time. Since then, multiple platforms have further raised their prices, widening this gap.
Unfortunately, prices will only continue to grow as companies continue to seek a profit. As of October 2023, Netflix was the only streamer with a positive gross cash flow. This feat was achieved by leading the industry in a password crackdown and introducing an ad-level subscription tier.
However, Netflix’s changes are not over, as the streamer is eliminating its cheapest ad-free option, forcing subscribers to jump up to a more expensive premium tier or settle for an experience with ads. All of Netflix’s business decisions have been followed by others in the industry, suggesting this move may be followed by more platforms later in the year.
While ad-tier subscriptions are causing the industry to more closely resemble cable, they are also opening the door for subscription bundles which could help consumers save on costs in the future.
In Canada, there is currently a deal for consumers to bundle Netflix, Disney+ and Prime Video for only $20 per month, saving consumers 17% across the three subscriptions.
As prices continue to rise, bundles and ad-tiers may prove to be the industry’s savior as consumers struggle with the rising prices.
Movieguide® previously reported:
It now looks like merger deals like Disney and Charter’s will become more commonplace in 2024.
Disney+ and Hulu are rolling out a combo streaming platform, while AppleTV+ and Paramount+ are supposedly in talks to create a bundle deal for subscribers.
Joe Earley, Disney’s president of direct-to-consumer, spoke about the partnership with Hulu, sayingthe goal for the bundle “is to inspire Disney+ and Hulu standalone subscribers to upgrade to the Bundle as well, once they see everything that can be accessed.”
The Hollywood Reporter also wrote of talks between Warner Bros. Discovery CEO David Zaslav and Paramount Global’s CEO Bob Bakish and chair Shari Redstone that explored a potential deal between the studios.
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