The cost of streaming TV shows and movies, once seen as a much cheaper alternative to having a cable box, is rising.
Streaming services like Amazon Prime, Disney +, HBO Max, Hulu and Netflix is increasing its monthly subscription fees now that they have settled on the market and can count on more consumers cutting the proverbial cord.
Amazon is increasing the cost of your annual Prime subscription, which includes access to its original streaming content, between $ 20 and $ 139 a year, while Netflix raised its monthly rate to $ 2. A premium Netflix subscription now costs $ 19.99 a month, allowing customers to watch TV shows and movies on up to four devices at once.
Given the diversity of content available for real-time playback, consumers are subscribing to various platforms to keep up with their favorite programs, often paying more than one monthly streaming bill.
“I’ve noticed that when you have a few, it almost becomes like a car payment,” a streaming subscriber told CBS News correspondent Lilia Luciano.
“Any playback platform you can imagine, I’m subscribing right now,” said another streaming fan.
Companies like Netflix hope it’s worth raising prices for consumers who want to enjoy new seasons of their favorite shows.
“Dog-eating environment”
In fact, streaming platforms have invested billions of dollars in creating content that has earned them Oscars and other industry awards. In 2021, for example, Netflix spent about $ 17 billion on creating and producing original content. This increase in spending, combined with inflation, has increased costs for consumers.
“Services really see content as their weapon to ensure that people subscribe to, and stay subscribed to, in this dog-eating environment,” said entertainment analyst Paul Erickson. He expects streaming providers to keep raising their prices as long as consumers are willing to absorb the costs.
Price increases will end when consumers “start leaving the service or stop subscribing,” Erickson said. “But I think that’s a long way off, especially if prices are rising gradually over time.”
While playback costs are rising, Erickson believes compelling content will keep viewers on board.
“It’s hard for people to stray from what they’re transmitting now,” he said. “What they’re getting is more value than what they were getting on traditional television. With a cable package, you had a lot of things that you weren’t interested in watching and the channels that you do.”
There is still room to raise prices
Analysts also think that real-time streaming prices can rise without generating too much “return,” the industry’s term for customers who sign up and then cancel a subscription.
Amazon could charge a lot more for its Prime subscription, which includes video streaming, without alienating customers considering the reliance on purchasing club subscribers for free e-commerce shipments and other perks, another analyst told CBS MoneyWatch.
“We believe that Amazon could increase prices by 30 to 40% more and you would still have a negligible loss because many depend on Amazon Prime as part of their trade cube, and transmission is part of that,” he said. say Dan Ives, a technology analyst at Wedbush Securities.
Experts also think that streaming services will begin to expand their offerings with more live sports coverage. Of course, not everything will be in one place, and consumers who want it all will have to subscribe to various real-time playback services.
“You’ve selected a lot of that content and services, and what you get for that money is more relevant to you,” Erickson said. “And that’s the important part.”
How to Save on Streaming Invoices
More home streaming subscriptions also result in higher monthly bills.
“Before the pandemic, the average household had one or two subscriptions,” Ives said. “It’s four to five now. Streaming consumption is off the rails given what we’ve seen with many working from home and streamers increasing their services.”
Ives expects some households to be reduced to just a couple of subscriptions as COVID-19 cases decrease and more pandemic-era restrictions, such as the use of masks and social distancing, will be removed.
“As working from home becomes more of a memory, we will start to see a cut in certain services,” he said.
Another tip: Check your credit card bill to identify subscriptions that you may have forgotten once you signed up.
“More consumers are looking at their credit cards and not realizing that over the last few years they have registered for five, six, seven subscriptions,” Ives said. “And the rubber starts to hit the road if the contents aren’t there.”
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