“Streaming inflation” has been a hot topic with streaming subscribers lately amid a series of price hikes by media companies like The Walt Disney Co., which raised the price of its streaming services Disney+ and Hulu back in August.
However, rising prices do not seem to scare off consumers; In fact, they are signing up and spending more than ever before. Spending on streaming services in January 2024 rose more than 70% from 2021, while the share of households paying more than $100 a month more than doubled, according to a new report from Bank of America.
Conversely, the share of households spending less than $20 declined by 16% over the same time period.
“Millennials and Gen Xers pay more per household on streaming because they pay for multiple streaming subscriptions,” the report said. “These groups have also seen the largest increases in share of streamers over the past three years.”
Clayton Durant is an avid subscriber of Apple One (the bundle of Apple Music and AppleTV+), Spotify SPOT,
Disney, Netflix, Peacock, ESPN+, Crunchyroll – he intends to stay, prices rise and all.
“Netflix, I know they are raising their prices and are planning to do so again but I don't plan on leaving their service. They have a lot of great shows, and I'm a huge fan of their documentaries,” Durant said in a message. “For Disney, it would take a much bigger price hike than they started with.” Indeed, I would even jump off their platform just because I am a huge fan of their heritage.” Such as “Star Wars” and “Indiana Jones.”
The enduring appeal of streaming services like Disney DIS,
netflix nflx,
Amazon.com AMZN,
comcast Corp CMCSA,
Apple Inc. AAPL,
warner Bros Discovery Inc WBD,
Others belie price increases in the US by at least seven major streaming services over the past year. In fact, the average cost of viewing an ad-free streaming service has risen nearly 25% in just over a year, according to an analysis by The Wall Street Journal.
The steady stream of price increases highlights the latest phase in the streaming wars, after years of fighters offering low-cost offers seeking to win over customers, analysts say.
But after sustaining billions of dollars in losses, major streaming services are now raising prices and cracking down on password sharing in the pursuit of profits.
“It's an acceleration of the shift away from watching traditional TV via cable and satellite. We as consumers may not like paying for it, but the growth will continue as we watch higher-quality video content,” Jacqueline Corbelli, CEO of BrightLine Partners, said in an email. Which is now mostly distributed through live streaming apps.”
“Ironically, ad-supported packages reduce the cost of access and fuel streaming,” she added.
Mark Fina, CEO and principal analyst at SmartTech Research, said he's not sure American consumers are willing to pay more than $100 a month to stream content for an extended period of time.
“Given the crowded nature of the streaming content space and ongoing inflation concerns, I think we will see more room for consolidation, which could lead to several larger players offering more packages,” Fina said in an email.
