Prices continue to rise
December 30, 2022
Various factors are considered by people when deciding to invest in a streaming service. One of the foremost components of this decision is to consider the price. Over the years prices to view movies and tv shows have jumped to extreme amounts and truly make people question if they are getting enough content for the substantial amount of money they paid.
The rising prices of streaming services is a result of the inflation that is present in the United States. In order to compete with other companies and bring in sizable profits, there is a necessity for streaming services to charge a price that is consistent with the country’s economy. Additionally, increase in prices is due to the introduction of new and exciting features which allows the companies to warrant the inflation of subscription prices.
To place the idea of rising prices in perspective, the highly-popular streaming service, Netflix, was originally $7.99 per month for a standard subscription when initially released. As of December 2022, a standard subscription for Netflix costs $15.99 per month. This drastic increase in price is thanks to inflation as well as the service’s implementation of other levels of subscription. For example, Netflix now offers a basic subscription with ads at $6.99 per month, a basic subscription at $9.99 per month, a standard subscription at $15.99 per month, and a premium subscription at $19.99 per month. Although the great disparity between the basic and premium subscriptions is evident, Netflix manages to draw in major revenue through each level of subscription.
Other streaming services have raised their prices in an effort to make their presence known in the highly competitive industry. Disney has succeeded in raising the cost of their services by offering the well-known Disney Bundle. The Bundle was initially released in 2019 along with the launch of the popular service Disney+. Hulu, Disney+, and ESPN+ are all owned by Disney, and they can be purchased together for $14.99 per month. This bundle system seemingly draws in even more revenue to Disney because consumers are more enticed to purchase three streaming services for the cost of one as opposed to purchasing each service separately. Although the Disney Bundle started at $12.99 per month upon release in 2019 and has since increased, it has still maintained a steady flow of revenue due to the allure of the package to consumers.
In an attempt to draw in more profit, streaming service companies like Netflix and Hulu have also introduced levels of subscription that include advertisements. The basic subscription with ads for Hulu costs $7.99 per month while the commercial-free streaming subscription costs $14.99 per month. The advertisements on the service appear various times throughout the content that is streamed for a time frame of sixty to ninety seconds depending on the specific ad. Many are inclined to invest in the cheaper membership at the expense of watching advertisements, and this allows ads to serve as Hulu’s largest source of revenue.
Similarly, Netflix launched its new level of subscription on November 3, 2022. This level is the least expensive Netflix subscription at $6.99 per month which includes basic content as well as advertisements. The company decided to implement a cheaper subscription with advertisements in hopes that they would draw in more profit through consumers looking for a less expensive streaming service subscription.
Although streaming services are steadily raising their subscription prices, it is simply an attempt to stay afloat in such a competitive market. Although consumers may not feel the desire to pay more money towards streaming, the raise in price is warranted due to the need to maintain high revenue. Streaming services have not seen a drop in viewership, and consumers remain engaged with the content that they have to offer. Viewers should, however, expect to see even more price increases in the future.