Streaming Sticker Shock: Why Media Companies Keep Asking for More – The Average Joe
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    Streaming Sticker Shock: Why Media Companies Keep Asking for More

    victorlei

    October 30, 2023

    Could there BE anything worse than an ad break? Yeah, just check your credit card bill and count how many streaming platforms siphon a few extra bucks from your accounts each month.

    Streaming prices have soared in recent years with little signs of slowing down. Netflix (NASDAQ:NFLX) kicked off the latest round of price hikes in October, raising its premium US streaming prices by 15%. Others quickly followed — with Apple (NASDAQ:AAPL) boosting the price of its Apple TV+ by 43% just last week. Analyst Paul Erickson told The Verge that Netflix is becoming “a bellwether for what a lot of other companies are going to do.”

    • Prices have risen so much that the number of streaming platforms and their prices cost more than basic cable TV packages.
    • Today, premium pricing on seven of the largest streaming platforms has risen 25% to $105.93 from 2022 — while the cost of cable TV averages out to $83.35 per month.

    Think you could just look for your favorite show on a different platform? Those days are gone, too. Streaming platforms are closely keeping their most prized shows like Friends and Stranger Things behind higher and higher paywalls. Want to see Chandler Bing’s comically-timed antics? That’ll cost you $20/mo on Max. RIP king.

    No more cheap thrills

    Consumers had grown accustomed to cheap entertainment in the early days of streaming. But turns out, producing that content really doesn’t come cheap. Platforms (and investors) have realized that in recent years, especially as cable subscription and box office revenue declined. So what do they do? Go on a price increase binge.

    • In 2021, Netflix accomplished a feat that few thought possible. It stopped borrowing money and has since been paying down its debt, which peaked at $16B in 2020.
    • And they might not have been able to do it if it weren’t for the 44% price increase on their premium subscription since 2019.

    But the price hikes may also be a tactic to drive users towards ad tiers, which generate more revenue per user, according to The Hollywood Reporter. Have your pick — higher stream prices or more ads?

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