Netflix, Disney+, Hulu, Max, Apple TV+ – It doesn’t matter which streaming service you subscribe to; they’re all jacking up prices.
Netflix recently increased its basic plan from $9.99 to $11.99 per month. Hulu went from $14.99 to $17.99. Apple raised subscriptions from $6.99 to $9.99. Max went from $14.99 to $15.99, and Disney+ raised its ad-free tier from $10.99 to $13.99.
Suddenly, cutting the cord doesn’t seem to be cutting much at all for customers looking to save money from their cable and satellite bills.
So why do these streaming services keep raising prices? It’s quite simple, according to KTLA consumer reporter David Lazarus.
“Streaming costs are rising, and will continue to rise because the industry remains in search of a sustainable business model,” he says.
In other words, they’re generally not making money – yet.
With its rich and vast library of original series and films, only Netflix (the original video-on-demand streamer) has succeeded in turning a profit to date, Lazarus says. The rest are spending heaps of cash on content with the hope, and Wall Street’s expectation, that profits will soon follow.
“It’s a tricky situation. The streaming companies know that consumers are sensitive to pricing during this period of high inflation,” Lazarus says. “At the same time, they’re investing millions of dollars into new content to attract eyeballs.”
Disney managed to cut its streaming losses with Disney+ and Hulu to $512 million in its fiscal third quarter from $1.1 billion a year ago. Warner Bros. Discovery lost 1.8 million streaming subscribers when it rebranded HBO Max as Max this year, yet still came within $3 million of breaking even on its direct-to-consumer segment in Q3.
Paramount+ lost $424 million in the quarter.
Apple doesn’t disclose revenue for Apple TV+, instead lumping it together with its services business which also includes Apple Arcade, Apple News+ and Apple One.
It’s a competitive industry and, with studies showing that most people will subscribe to only two or three streaming services at a time, potentially a zero-sum game for streamers.
“The industry seems to be inviting consumers to make hard choices,” says Lazarus. “In a sense, the industry’s financial woes are a self-inflicted wound. Many introduced their streaming services at super-low prices to attract audiences. They’ve since steadily raised rates to stem the financial bleeding. But this just reinforces the perception that streamers are no different from cable companies, jacking up prices at regular intervals without improving service in any meaningful way.”