After cutting cords, streaming services raise prices

The cost of streaming TV shows and movies, once considered a much cheaper alternative to owning a set-top box, is rising.

Streaming services including Amazon Prime, Disney+, HBO Max, Hulu and netflix are increasing their monthly subscription fees now that they have a foothold in the market and can count on more consumers cutting the proverbial cord.

Amazon increases the cost of his annual Prime subscription, which includes access to its original streaming content, from $20 to $139 per year, while Netflix has increased its monthly rate to as much as $2. A premium Netflix subscription now costs $19.99 per month, allowing customers to watch TV shows and movies on up to four devices at once.

Given the sheer volume of content available for streaming, consumers subscribe to multiple platforms to follow their favorite shows, often paying more than one monthly streaming bill.

“I realized that once you have a few, it almost becomes like a car payment,” said streaming subscriber, CBS News correspondent Lilia Luciano.

“Any streaming platform you can imagine, I’m subscribing right now,” said another streaming fan.

Companies like Netflix are hoping the incremental price increases are worth it for consumers looking to binge on new seasons of their favorite shows.

“Dog-Eat-Dog Environment”

Indeed, streaming platforms have invested billions of dollars in creating content that has earned them Oscars and other industry accolades. In 2021, for example, Netflix spent around $17 billion creating and producing original content. This increase in spending, combined with inflation, has pushed up costs for consumers.

“Services really see content as their weapon to make sure people subscribe – and stay subscribed – in this dog-eating dog environment,” said entertainment analyst Paul Erickson. He expects streaming providers to keep raising prices as long as consumers are willing to absorb the costs.

The price increases will end when consumers “start leaving the service or stop subscribing,” Erickson said. “But I think that’s far from the case, especially if you increase prices gradually over time.”

Experts also believe that streaming services will start expanding their offerings with more live sports coverage. Not everything will be in one place, of course, and consumers who want it all will need to subscribe to multiple streaming services.

“You’ve curated a lot of that content and those services — and what you get for that money is more relevant to you,” Erickson said. “And that’s the important part.”