Streaming Prices Continue to Rise

After years of streaming services dominating the motion picture industry by providing consumers with an abundance of content coupled with a relatively low subscription fee, streaming services are under pressure from Hollywood and Wall Street to increase prices to match that of cable TV.

15 years ago, Netflix began its mass exodus away from cable TV by providing its customers with limitless TV for a fraction of the cost of the average cable package. Those numbers have not changed much as last year the average cost of a streaming service subscription was only $73 compared to its cable counterpart of $83. Disney+ was able to accumulate 100 million subscribers in its first year by offering its services for as little as $6.99 a month.

This model has become unsustainable as Hollywood is shelling out more and more money to create exclusive content with little gain. Netflix increased its basic subscription fee from $9.99 to $15.49 earlier this year with other streaming services planning on doing the same come autumn. The result is a significant increase in the average cost of streaming services reaching $87 now surpassing that of cable TV.

Source: Bloomberg