When I was a kid, I watched shows like “The Love Boat” and “Diff’rent Strokes” for free on a turn dial TV, using an antennae to get reception. In the 1980s, cable TV came along and my family subscribed for better reception and for more channels. During this era, cable companies earned revenue from both subscription fees and advertising dollars.
For the last several years, U.S. households have been cord cutting, that is, moving away from traditional pay TV services (like cable and satellite TV). At the same time, the adoption of streaming services has exploded. In 2013, 44 million households paid to “Netflix and chill.” Netflix subscribers have more than quadrupled to 193 million since then.
The streaming service market is more crowded than ever. There are paid services (like Amazon Prime Video, Disney+, Hulu and YouTube Premium) and free services (like Peacock, Pluto TV and Tubi). But “free” really means that streaming services get paid by advertisers. With paid streaming, you–the consumer–pays. This is the same revenue model cable companies had in the 1980s.
Prices for streaming services will continue to increase
Netflix implemented new price increases this week for its streaming services. The move suggests more subscribers leaving for other services as competitive options increase. Former partners (like Disney) have pulled content from the company, which means Netflix’ costs have increased as it develops its own content. Prices will continue to increase as competition increases and the company grows its library of movies and shows.
Subscribers should buckle up and prepare for more price increases or prepare to watch more advertisements.Streaming TV subscribers should buckle up and prepare for more price increases or prepare to watch more advertisements. Click To Tweet