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Streaming service subscription rates are experiencing a surge as companies try to offset escalating content expenditures while introducing lower-priced, ad-supported alternatives. Recently, Disney became the third major entertainment giant to raise its rates this year, following in the footsteps of Netflix in January and Amazon a month later. The cost of Hulu’s new rate is set to take effect next month, while Disney+’s base ad-free plan is expected to increase by a significant 38% in December.
In a bid to retain subscribers amid these price hikes, streaming platforms are heavily investing in high-quality productions like “House of the Dragon,” “The Lord of the Rings: The Rings of Power,” and the latest season of “Stranger Things.” However, the question remains: will these offerings be enough to prevent customer churn, particularly when consumers are already grappling with the impact of inflation on their budgets?
According to Michael Nathanson from MoffettNathanson, major streamers find themselves compelled to raise prices as they strive to meet Wall Street’s increasing focus on profitability. He emphasized the importance of streamers concentrating on their return on invested capital and generating free cash flow in an Aug. 11 research note.
While Netflix and Disney have already made adjustments to their pricing, there are still pricing details yet to be revealed for the combined Warner Bros. Discovery service expected to launch next year and Netflix’s upcoming ad-supported plan.
Let’s take a look at the current pricing and offerings of some of the major streaming services:
Netflix
- Pricing: Rates range from $9.99/month to $19.99/month, with an ad-supported plan scheduled to launch in 2023 (exact cost yet to be announced).
- Recent hits/upcoming tentpoles: “Stranger Things 4”
- Worth it if: The extensive content library with a diverse range of viewing choices is a priority.
HBO MAX
- Pricing: Ranges from $9.99/month with ads to $14.99/month without, with the merged HBO Max-Discovery+ service set to debut in summer 2023 (price not yet known).
- Recent hits/upcoming tentpoles: “House of the Dragon” (HBO)
- Worth it if: You’re a fan of HBO shows or content available in its specialized hubs like TCM, DC, or Cartoon Network.
Disney+
- Pricing: Currently $7.99/month without ads, set to increase to $10.99/month on Dec. 8, with an ad-supported version becoming available at the same time for $7.99/month.
- Recent hits/upcoming tentpoles: Marvel’s “She-Hulk: Attorney at Law,” Lucasfilm’s “Andor”
- Worth it if: You enjoy Marvel or Lucasfilm programming or have kids who love classic Disney fare.
Hulu
- Pricing: The ad-plan price will increase by $1 to $7.99/month on Oct. 10, and the ad-free plan will go up by 15% to $14.99/month.
- Recent hits/upcoming tentpoles: “Prey”
- Worth it if: You are a devoted viewer of its original programming, including “The Handmaid’s Tale” and “Only Murders in the Building.” Starting this fall, next-day NBC shows will be exclusive to Peacock.
Amazon Prime Video
- Pricing: The annual price for Amazon Prime services, which includes streaming and e-commerce benefits, recently rose to $139/year.
- Recent hits/upcoming tentpoles: “The Lord of the Rings: The Rings of Power,” “The Boys”
- Worth it if: You appreciate the added benefits of Amazon Prime or are a fan of J.R.R. Tolkien’s work.
AppleTV+
- Pricing: $4.99/month
- Recent hits/upcoming tentpoles: “Ted Lasso,” “Pachinko”
- Worth it if: You prefer a lower-priced option and enjoy quality offerings, although the library might not be as extensive.
Paramount+
- Pricing: Ranges from $4.99/month to $9.99/month
- Recent hits/upcoming tentpoles: “1883,” “Halo”
- Worth it if: You are a fan of “Star Trek” programs or Taylor Sheridan’s universe.
Peacock Premium
- Pricing: Ranges from $4.99/month to $9.99/month, with a free ad-supported version offering limited content.
- Recent hits/upcoming tentpoles: “Bel-Air,” “Love Island USA”
- Worth it if: You’ve cut the cord and want access to next-day NBC shows, or you’re an avid follower of Premier League soccer.
As the competition intensifies, streamers are facing the challenge of balancing their content offerings and pricing strategies to maintain customer loyalty while seeking financial viability in the ever-evolving landscape of streaming services.
