Streaming prices are skyrocketing, but that’s not scaring away customers. Subscriptions reportedly remained relatively steady, according to a new report from The Wall Street Journal.
Recently, streaming platforms such as HBO Max, Hulu and Disney+ all raised prices for at least some of their offerings.
Netflix hiked subscriptions in January, while Peacock did so in July. Additionally, Apple TV announced its latest increase in August and Paramount revealed this week it would raise the price of Paramount+ early next year.
It’s the latest in a so-called “wave of streamflation,” as reported by the Journal.
Why are prices soaring?
But critics argue that customers are paying more despite a lack of access to some popular programming. For instance, Warners Bros. Discovery’s HBO Max — whose cheapest package is now $10.99 per month, an increase of $1 from its previous rate — lost its NBA games package this year. The company is also dropping CNN’s live news stream this month, as the news outlet launches its own streaming service.
Streaming prices continue to rise in part because some media corporations have ramped up sports coverage, shelling out big bucks to obtain the rights to the NFL, Major League Baseball, Ultimate Fighting Championship, Major League Soccer and other popular sports, according to the Journal.
The company contends that it has added sports coverage — NASCAR, Big 12 football and basketball and College Football Playoff coverage — in defense of its pricing.
Despite price increases, subscriptions remain steady
However, even with the price increases, the number of household subscriptions reportedly remained largely unchanged. Analysts note that if price hikes are causing customers to reconsider subscriptions, it’s not showing in the data, as streaming rates for major companies remain rather consistent.
Disney+ and Hulu reportedly had higher subscription cancellations for September following the temporary suspension of late-night show host Jimmy Kimmel for his remarks after the killing of conservative activist Charlie Kirk. However, new subscriptions for both services were also reportedly strong for that month.
‘Netflix has really cracked the code’
Netflix, meanwhile, has cancellation rates low at a reported flat rate of 2% for all but one month since May 2023, the Journal said. The streaming service previously had the cheapest ad-free package at $9.99 a month. But that has now risen to $11.99, with other tiers priced up to $24.99 a month. One plan with advertisements is available for a cost of $7.99 per month.
Unbiased. Straight Facts.TM
Netflix was first established in 1997 as an online DVD rental-by-mail-service, as it looked to challenge video stores.
“Netflix has really cracked the code in terms of pricing,” Robert Fishman, an analyst with MoffettNathanson, told the Journal.
He added that its tactic of leaving customers choices of premium-priced packages as well as less expensive packages with ads has been a successful strategy.
More options lead to fewer cancellations
Analysts told the Journal that subscriptions have not dipped significantly because many customers have the option to switch to cheaper options, with ads on many streaming services.
According to Comscore’s State Streaming report in October, roughly half of Netflix viewing hours came from customers using the ad-supported option last month, up from about one-third in August of last year.
Streaming giants join forces
Streaming platforms are still searching for innovative ways to increase profits and convince advertisers to promote their products on their services — which has led to previously unlikely partnerships to attract more customers.
For example, Peacock and Apple TV began a joint package last month that is priced at $14.99 per month with advertisements or $19.99 per month without advertisements. Those prices compare to about $24 or nearly $30 a month if users subscribed to each service separately. ESPN and Fox One also launched package options for $39.99 this summer.
The post Rising TV subscription costs have consumers swimming upstream appeared first on Straight Arrow News.