Although streaming services were gaining momentum before 2020, the pandemic sent them spiraling upward. Original content and old favorites were in demand. And most viewers were tired of watching free television riddled with commercials.
But several price increases may have deterred some subscribers. Recently, price hikes have increased Americans’ bills. You may not even have noticed your favorite show is now costing you more. So how much are streaming services prices rising, and why?
Hulu Raises Prices
In October 2022, Hulu subscribers were hit with an increase. Owned by Disney, Hulu’s ad-supported plan went up a dollar. The price rose to $7.99 per month, while the ad-free plan rose from $12.99 per month to $14.99.Hulu has increased its plan every year since 2019.
Bundling has increased as well. In December 2022, Hulu subscribers saw an increase in the bundle of Hulu Live TV, with ads, ESPN, with ads, and Disney, with no ads. The price jumped from $69.99 to $74.99 per month.
Apple Price Hike
Subscribers had their wallets hit in October 2022 when Apple increased its subscription rate. But Apple had not had an increase since November 2019, when it was launched. In October 2022, the monthly price for Apple TV streaming went from $4.99 to $6.99 per month.Netflix Past Increases Hurt Subscriptions
Netflix has lost subscribers, partly due to price increases, but is bouncing back. It lost 1.2 million subscribers in the first two quarters of 2022. At that point Netflix planned to offer a new ad-supported tier. Twenty-five percent of users said they planned to cancel.But in October 2022, Netflix added 2.4 million subscribers in the third quarter. It now has 223 million subscribers.
In 2011, a standard Netflix plan was $7.99 per month. That same standard plan is now $15.49. Premium plans go for $19.99 per month.
ESPN Price Goes Up 43 percent
In August 2022, ESPN plus subscribers took it on the chin with a 43 percent rate increase. Their monthly premium increased from $6.99 to $9.99 per month. That brought its annual rate from $69.99 to $99.99.ESPN+ raised its prices twice in 2021, but this was its largest increase. Disney owns ESPN+.
Disney+ Online Subscription Rate Raised
In December 2022, Walt Disney Company’s online streaming service, Disney+, increased its subscription plan from $3.00 to $10.99. That takes its yearly subscription from $30 to $109.99.Disney Launches Paid Plan With Ads
Disney launched Disney+ basic, which includes ads. It’s available in the United States for $7.99 per month. This was the previous price for the ad-free version.The new price for the ad-free version went up to $10.99 per month. A Disney bundle includes Disney+, ESPN+ and Hulu for $12.99 per month. The bundle without commercials is $19.99 monthly.
HBO Max Holding Price
HBO Max has not raised the price on its ad-free tier since its launch in May 2020. It had remained steady with the $14.99 monthly price. Ad-plans on HBO Max are $9.99 per month. You only receive four minutes of ads per hour.Why the Hikes of Streaming Costs
Building a content library costs. Many streaming services must pay top dollar to produce, purchase, and keep original programming—programming costs. And that cost is an economic reality when setting a price.Streaming services like Netflix and Apple have refused to cash in on licensing their original programming to other platforms. Instead, they keep their original content exclusive. This makes them dependent on subscriber income.
Ad-Supported Streaming
The last year brought many ad-supported tiers. Some of these included Disney+, HBO Max, and Netflix. Consumers seem to be going along with it. Many Disney+ subscribers switched to the lower-priced ad-supported tier when it became available.But although ad-supported streaming is becoming more popular, many subscribers still desire ad-free programming.
Subscriber Usage Continues
Premium subscription streaming services, in general, grew 4 percent in the second quarter over the first quarter of 2022. As of September 2022, 87 percent of U.S households had video streaming.As of November 2022, the average American household had four paid streaming services. But the number-one streaming service, despite a rough 2022, was still Netflix, with 223 million subscribers worldwide.
Streaming services are brought in a total of $24.1 billion in revenue in 2020, but is expected to reach $100 billion by 2025.
Who Uses Streaming Services
The majority of U.S. households use a video streaming service. But who is streaming video the most?Seventy percent of millennials use video streaming services. In contrast, 49 percent of baby boomers use it.
At 58 percent, most streamers are single, and 78 percent live in urban or suburbia. Fifty percent have children
But the age group that uses streaming the most is Gen X (35–54) at 42 percent.
Streaming Popular Despite Increases
Although streaming is popular, streaming services may lose some subscribers due to higher rates. In addition, these services often must deal with “churn and return” behavior. That’s when you cancel a service and then return within the year. This usually happens after a series has ended.With continual price increases deterring some people, in order to grow, ad-supported streaming may be the way of the future for many services.
The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
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