The Great Streaming Price Hike: Is It Too Much?
Like Frogs in Hot Water, We Might Just Jump Out
I’m among the millions of Americans who stopped relying on cable or satellite operators for video entertainment. In other words, I’m a cord cutter, and there’s been no looking back. Right now, I have a veritable cornucopia of amusement for a collective price tag that’s well below what I was paying for a video subscription from Verizon — thanks, in part, to sharing some accounts with family members.
I’m such a huge fan of the crime caper Lupin on Netflix that I’m ready to launch a protest for its return by camping out in front of the show’s production company. The sci-fi alternate history of the space race, For All Mankind, on AppleTV+ is riveting me. And I’m happily dabbling in a variety of fare on Max, Hulu and Amazon Prime.
All of this is subject to change. Most streaming platforms that rely on subscriptions have raised their rates in the recent past — and some are planning other increases. At the same time, cable operators aren’t giving up on any of us defectors. They’ve come up with a new way to lure us back.
When I think about what’s happening, it reminds me of that old fable about the little froggy that doesn’t realize he’s in a pot of water that’s slowly reaching the boiling point until it’s too late. Not that we’re going to die from all this, but our tolerance for the added costs is being tested. The question becomes: when are most of us likely to cry “enough!” and switch our TV options again — just as so many of us did when we cut the cable cord?
Later in this story, I’m going to get into specific pricing-hike info for several subscription services, like Netflix and Amazon Prime. But first, I want to give you some “inside baseball” about the dynamics at play, some of which has to do with the cable operators. If that makes your eyes cross, just scroll down to the “Price Hike Breakdown” section.
STREAMING BUSINESS LOGIC
I’ve just come off reporting a slew of stories about media company quarterly earnings reports. In their calls with analysts, top executives talked about what they have planned, along with what they’ve done recently. Investors have been keenly aware that the companies with streaming platforms that charge fees have been losing lots and lots of money. The streamers have done that in order to bankroll expensive programming and get as many consumers in their tents as possible during the early years.
Now, the cash bleeding has got to stop. Thus the price changes and the introduction of ads, in some instances.
During several of the earnings calls, execs were really excited about a new deal between the huge cable systems operator Charter (Spectrum) and The Walt Disney Co. It could be a gauge for what’s going to happen more broadly in the future. On the face of it, the Disney-Charter negotiation was a typical tug-of-war in the pay-TV business, as programming companies try to get distributors to pay more money to carry their channels, and cable operators try to do just the opposite.
The new agreement was different because Charter was allowed to get rid of some of the less-popular Disney channels that had been shoehorned into earlier deals. And it is now able to add Disney’s streaming platforms to its offerings. Disney owns three of them: Disney+, ESPN+, and Hulu.
Why’s that so exciting? Programmers get a fee from operators for every subscriber that can watch their networks. Because the operators have lost customers like me (and maybe you), the networks have seen their revenue dwindle. Their hope is that the operators will now offer such attractive bundles of channels and streaming platforms that consumers who have dropped them will reverse course and come back.
In other words, the slimmed-down world of a la carte services at lower costs may be bulking up again into larger bundles — kind of like before, when cable and satellite were more popular.
To be sure, what Charter and Disney agreed to isn’t entirely new. For example, while I dropped Verizon’s cable TV service, it’s still my broadband provider, and I pay Verizon a little extra every month to receive Max. The Verizon price for Max is slightly less expensive than if I were to pay for it separately.
Of course, whether these combined packages of cable channels and streaming platforms will become widespread has yet to be determined. But just about everyone with a stake in this game thinks that they may be.
The final deciders, however, are you and me. We certainly have some other options to choose from. Some of us, for example, may downgrade to lower-cost versions of streamers that include advertising. Or maybe we’ll get fed up with paying for any streamers at all and just watch shows on platforms that are free and filled with ads. There’s a bunch of them, like Tubi and Pluto.
PRICE HIKE BREAKDOWN
Below is a list of recent cost increases for a selection of streamers, based on my own research of what’s charged in the U.S. For an even more thorough understanding, take a look at this article on the subject in Consumer Reports published in late September.
Amazon Prime Video — $139 per year or $15 per month has given subscribers a wide selection of shows like Thursday Night Football, Marvelous Mrs. Maisel, and Wheel of Time. And, of course, there’s free shipping on Amazon Prime purchases.
Look for that to change early next year when the price is increasing by $2.99 a month — unless you like (or are willing to tolerate) shows sprinkled with ads.
AppleTV+ — Last month Apple raised its rate by $3, to $9.99 a month. To get more people to test drive the platform, it offers new owners of Apple devices three months for free. And even if you don’t have a new iPhone, iPad or Mac, you can get the first month free. (More on that here.) In reporting the hike, CNN noted that it raised the rates in October 2022 from $4.99. Which makes me wonder if this is going to be a regular yearly thing.
There have been reports for quite some time that AppleTV+ will include ads at some point. Reportedly, they’re already in its live sports content. (I haven’t watched it.)
Among my favorite shows on Apple are The Morning Show, Ted Lasso, Shrinking, and (as mentioned) For All Mankind.
Disney/ESPN/Hulu — The Mouse House increased its pricing last month and offers consumers several different options and price points for combinations of Disney+, ESPN+, and Hulu. The cost goes up as the amount of advertising goes down. If you opt for the whole nine yards and pay $25 a month, you can get all three platforms. That’s a $5 increase over the previous rate.
The offerings include loads of sports programming, along with Marvel, Pixar, 20th Century Studios and Star Wars content. There’s the Loki series, Lego franchise, High School Musical, and Ashoka, to name just a few of the many shows.
There’s more changes up ahead. Bob Iger, Disney’s CEO, told analysts about plans for rolling out the beta version of a one-app experience next month, followed by an official launch next Spring. We’ll have to see how that will change the pricing.
Max — A fairly new, all-in-one platform, Max includes Warner Bros. movies and shows on HBO, Cinemax and several other networks in the Warner Bros. Discovery family. Among them are Discovery, CNN, Turner Classic Movies, TNT, and Cartoon Network.
This is the place for fans of shows like Succession, The Last of Us, Hacks, and Abbott Elementary. In the future, look for the movie Barbie, a new prequel to Game of Thrones and a Harry Potter series.
The least expensive version, with ads, is $9.99 a month. The middle tier is $15.99 and allows users to watch two simultaneous streams and download 30 shows. For $19.99, you can stream on four devices at once and download 100 shows. The rates increased to those levels last January. And so far, there’s no word when the next rise might come. But Warner Bros. Discovery CEO David Zaslav has hinted that it’s in the works.
Netflix — We had a couple of pricing “ouches” from this streaming giant this year, most recently in late October. Earlier in 2023, Netflix offered customers a lower-priced option with advertising and began cracking down on passcode sharing. We’ll have to see how the rates change (or not) in 2024. But right now, Netflix offers a few options for lovers of shows like All the Light We Cannot See (which I loved), Suits, Lupin, and The Witcher.
If you’re willing to watch ads, it’s $6.99 a month. Although it’s reportedly missing about 5–10% of the shows that are available if you’re willing to pay for a higher-priced option. Prices go up from there, topping at $22.99, which has increased by $3. That option allows for four extra users who don’t live with the account holder. You can add extra users for an additional cost.
Paramount — Back in June, the streaming platforms Paramount+ (previously, CBS All Access) and Showtime were combined into a bundling option. It came with some price hikes. An ad-infused Paramount Essentials version (without Showtime) is available at $6, an increase of $1. Live feeds of CBS stations aren’t included with that option, but subscribers do get feeds of NFL games.
Travel up a couple of rungs on the pricing ladder and you can get a combination of Paramount+ and Showtime programming in the Premium tier, which costs $12, a $2 increase.
Paramount+ is home to originals like 1923, a spinoff of Yellowstone (which is on Peacock, weirdly enough). There’s also spinoffs of Star Trek and newer theatrical movies like Top Gun: Maverick and Mission: Impossible — Dead Reckoning Part One.
In Paramount’s latest earnings call, Robert Bakish, president and CEO, said that the rate of defections after the prices increased weren’t as bad as they thought it would be. Good for Paramount, but maybe bad for us. Bakish signaled that further price increases were likely.
Peacock — This streaming option is home for content from NBC along with other channels owned by Comcast’s NBCUniversal unit (like Bravo, USA Network, Syfy, and Telemundo). There’s also some originals like Poker Face (I’m a fan) and Love Island. Theatrical movies include Jurassic World: Dominion and the Jordan Peele horror flick Nope. Premiere League soccer and WWE wrestling matchups are also in the mix. In fact, the service claims to have more sports than any other streaming service.
There used to be a free version of Peacock with ads. But now, if you’re a brand new subscriber? Fuhgeddaboudit. That option’s off the table. Peacock also increased its pricing a couple of months ago by $1 or $2 a month. Under the new plan, if you’re willing to watch ads, Peacock is $5.99, and without ads it’s $11.99. Pay for a whole year at once, and you’ll 17% off those prices.
When considering all these price rises together, it may seem like an additional dollar or five isn’t a lot. Maybe it’s not enough to make most of us cancel some (or all) of our paid subscriptions. And maybe the allure of going back to a cable TV with streaming options just isn’t that big of an attraction. At least for now.
I certainly don’t blame the companies involved for trying to make financial sense of their businesses, and I enjoy much of what they have on offer. But it’s also true that a lot of us have no choice but to limit the number of entertainment options we’re willing to pay for. Our wallets only stretch so far.
There comes a time when every smart frog learns to jump out of the water. For those in the TV stream, is it now, or maybe later?