Various streaming services are making headlines once again. Unfortunately, this time it’s not about a new hit TV show or a groundbreaking release, but headlines are mostly related to a rise in their prices.
Streaming service providers are raising prices, cracking down on account sharing, and introducing ad-supported tiers. This is causing frustration among consumers, who are considering canceling subscriptions, resorting to piracy, or using alternative streaming platforms.
Major streaming platforms announce price hikes.
Without a doubt, over the past few years, streaming platforms have transformed the way we consume media. They provide the convenience and broad array of content at our fingertips, that is hard to refuse.
However, this streaming’s convenience comes with a monthly subscription fee— a cost that should also be convenient to our wallets. But of course, things change, the economy evolves and the ever-changing strategies employed by streaming providers need to also evolve. Streaming providers also need to maximize revenue.
In a bid to become profitable (and yet affordable for the majority), several major streaming giants have recently announced price increases. But for many experts, this was a bad moment. They are restructuring their pricing in an already weak economy. And on top of that, the price hikes align with a broader trend of streaming services seeking profitability after focusing on user growth for years.
But it is not that simple. Such changes have only sparked debates and concerns among subscribers.
Is it a good strategy to become profitable and serve better?
Or would this change in pricing structure hurt users with tight budgets, making them unable to afford it?
How, why, and who is raising prices?
The streaming industry faces challenges as it competes for both content and subscribers. Streaming wars are getting more bloodier than ever, fighting for subscribers and for content. As with any war, there is never a winning party, and the consumers are the ones who pay the most.
Streaming companies like Disney, Netflix, and Apple have been increasing their prices due to various factors. According to various sources, these factors include rising costs for content creation and maintenance, slower subscriber growth rates, inflation, and other economic aspects.
The costs of producing content have risen due to interest rate hikes and inflation, with companies like Disney, Warner Bros. Discovery, and Netflix spending billions on content. However, revenue per customer has not consistently grown and, in some cases, has declined. The maturing industry and high levels of market saturation have led to slower subscriber growth or even declines in subscribers for popular services like Netflix and Disney+. In response, some companies, first Netflix and now Disney+ and Hulu are cracking down on password sharing to stimulate new subscriber growth. While others are raising the prices of ad-free plans while keeping ad-supported options the same.
- Netflix started raising prices and cracking down on password sharing among users.
- Soon after Netflix raised prices, Peackock followed.
- Disney is increasing the prices of its streaming services, with the ad-free version of Disney+ seeing a significant 27% rise to $14 per month from the current $11, starting from October 12.
- Similarly, the ad-free version of Hulu will see a 20% price increase to $18 per month.
- Spotify has increased its premium plan prices in various countries, including the US, UK, and Australia.
- Music Streaming rivals like Apple, Amazon, and Tidal have also raised prices.
- Sports streaming also increased prices: NFL+ raises prices. Now they offer NFL RedZone on TV for $14.99/month
Consumer behavior predictions after rising streaming service prices
The cracking down on account sharing and implementing TV with ads strategies are only adding up to the uncertainty and frustration across streaming consumers.
Online discussion platforms reveal the impact of these changes, with a mix of frustration, resignation, and even humor. Some consumers talk about resorting to piracy, exploring alternative streaming platforms such as Plex or Kodi, and even coming up with creative methods to bypass the newly imposed restrictions, such as using proxy servers or VPNs.
It is all about the consumers after all. When consumer starts shifting their media consumption habits, such as via cheaper or more convenient alternative sources of entertainment, the industry starts to be disrupted.
Consuming behaviors is a quite dynamic, evolving, and unpredictable landscape. It is quite likely that a few rises in prices, and the crackdown on account shares and TV with ads will not disrupt the entire streaming industry, but it is likely to change the behavior of a few innovators and influencers.
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