Why Streaming Is Getting More Expensive
Speaker 1: Remember when streaming services like Netflix first launched and the appeal was that they were cheaper than cable, but now that there are just so many different platforms subscribing to all of them, which you'll need to do if you actually wanna watch everything, doesn't seem to be saving customers that much money anymore and people are getting tired of all those expenses. Let's go back to 2020. I know not the best year to relive, but just for a moment, think about all the time you spent at home streaming [00:00:30] shows like Tiger King's Succession and Ted Lasso. All those shows are on separate platforms, so if you wanted to keep up, you basically had to pay up. Suddenly streaming felt like it wasn't that much cheaper than cable. Today. Streaming platforms still dominate the world of entertainment, but we're not seeing as many new services pop up and existing ones are now more focused on surviving in such a competitive landscape.
Speaker 2: Some of the casualties, some of the costs of this sort of warfare. It's starting to [00:01:00] come out. People are starting to, companies are starting to see where they're kind of bleeding <laugh> from this fight that they're in. It's shaking out who's gonna survive and who's not.
Speaker 1: That means more big changes are coming as these companies fight for a permanent place in such a cutthroat industry. And yes, that probably means more price hikes. Sorry. Netflix essentially pioneered streaming as we know it. Back in 2007, the monthly subscription [00:01:30] rate was much cheaper than cable and you could access a vast catalog of movies and TV shows anytime this was a game changer and would eventually lead other companies to want a piece of the pie too. The problem is there are now a lot of slices of pie and people's appetites are waning. There are so many subscription services today and those costs all add up.
Speaker 2: This is sort of the peak saturation point of how many services you have to keep track of.
Speaker 1: This has led people to cut back [00:02:00] on the number of services they use. In 2022, Netflix lost hundreds of thousands of subscribers for the first time in a decade, this was a big deal because Netflix is a streaming giant that laid the groundwork for the industry.
Speaker 2: It scared everybody and now us people who actually subscribe for these services, we're starting to pay that price. We're seeing our prices go up and they're gonna continue going up. All those companies sort of realized all at once that everybody needs to start charging more [00:02:30] if their business is gonna be viable.
Speaker 1: Netflix also began cracking down on password sharing. So if you've been mooching off of someone else's account, you'll actually be forced to pay up. Netflix and other streaming companies like Disney plus have also rolled out ad supported tiers. Let's let subscribers pay less as long as they're okay with commercial breaks.
Speaker 2: The services like those ad supported tiers because they actually make more money when you are paying and advertisers are paying for that single account. So you're gonna see [00:03:00] these services really promote those ad supported tiers a
Speaker 1: Lot. Some streaming platforms are now releasing new episodes on a weekly basis. Instead of dropping full seasons, you can binge all at once. Vista's two things. One, it forces viewers who are hooked on a show to keep their subscriptions so they can watch new episodes when they drop. And two, it generates more buzz for those shows because they're suspense viewers go online to talk about what happened in that last episode and what could happen in the next one. [00:03:30] It essentially prolongs the lifespan of those shows and those subscription payments keep rolling in. I actually like when episodes are released on a weekly basis because there is just so much out there that trying to binge something so that you can keep up or avoid spoilers can be exhausting and sometimes it feels like a to-do list and watching TV is supposed to be enjoyable and relaxing. So even though companies do this because they have something to gain, sometimes it can be beneficial for viewers too.
Speaker 1: Mergers are probably [00:04:00] the biggest indicator that the streaming industry is maturing and adapting. The H B O max Discovery plus merger is the most prominent recent example. In April, 2022, discovery and Warner Media closed eight 43 billion mega merger to form Warner Brothers Discovery as part of the merger. It's combining the HBO O Max and Discovery plus streaming services starting in the spring of 2023. Paramount Plus is also merging with Showtime. The good thing about these mergers is [00:04:30] you can find more content on a single platform instead of hopping between so many services, but it comes at a cost, meaning price hikes, it's what companies have to do if they wanna survive in such a competitive space.
Speaker 2: Because so many of these services are part of big companies that vet so many billions of dollars, it's likely you're gonna see more of these companies combined going forward, cuz the only way you can survive is to be gigantic.
Speaker 1: If there was one streaming related perk to the [00:05:00] pandemic, it was getting to watch Blockbuster releases from home. Since theaters were closed, now that theaters have opened up again and people are more comfortable going, those days are pretty much over on the bright side. You won't have to wait as long to stream a movie after it comes out in theaters. Since the pandemic, the amount of time between when a movie is released in theaters and when it's available to Stream has gone down. The exception is hugely popular and profitable. Movies like Top Gun Maverick, which wasn't available to stream until [00:05:30] almost seven months after it came out. Despite all this media, companies are still pouring plenty of resources until building up their streaming efforts. In late 2022, Disney bought the last remaining share of BAMTech, the company that powers its streaming services.
Speaker 2: So they're continuing to put investment into these streaming services that you use. Even though we've reached the point where there's a group, they're investors that are starting to say, we want you to start showing us how you can make [00:06:00] money from these services, not just how you can spend money for them
Speaker 1: In the months and years ahead. It'll be less about launching new streaming services and more about the existing ones. Fine tuning their strategies.
Speaker 2: You'll have as many, if not more options than ever, but those options are gonna change. There might be sort of restrictions on things that weren't necessarily a premium perk before. Maybe it becomes something you have to pay for.
Speaker 1: That seems to be a common theme, paying [00:06:30] more for services that were initially marketed as cheaper, more valuable options. But as the market becomes more saturated and customers look for ways to cut costs, streaming companies will do whatever they can to keep you coming back for that TV show or movie. Everyone just can't stop talking about and they know that's probably a price you're willing to pay. Thanks so much for watching. Let us know in the comments which streaming services you have and whether you'll keep paying, even if prices go up. Is the price worth it to you? And [00:07:00] don't forget to give this video a thumbs up and subscribe for more from cnet.
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