Like clockwork, many companies are increasing the price of subscriptions on a regular basis. Take Disney as an example. It launched its streaming service Disney+ back in November 2019 with an introductory price of $6.99 per month in the United States. Today, Disney+ subscribers pay $18.99 per month for the service.
Disney increased the price annually starting in 2021. Each year, customers had to pay an extra $1, $2 or $3 to keep the subscription.
The company is not alone. Its biggest competitor, Netflix, launched in 2007 with a price of $7.99 per month. Today, Netflix subscribers pay $17.99 for the cheapest ad-free plan or $22.99 if they want 4K content and some extras. Granted, it took Netflix 18 years to get there, but it is a massive increase nevertheless.
Rising costs are not just an issue for customers of streaming services. Take software subscriptions as another example. Microsoft 365 cost $6.99 in 2022. Today, customers pay $9.99 per month, and even more, if they want integration of the Copilot AI.
Companies increase the price to improve rentability, make more per subscriber. However, they do not seem to have answers for a simple question: what happens when the bulk of subscribers can’t afford the subscription anymore?
What if the price of service does not justify its cost? While you could argue that the majority does not really care and will keep their Netflix subscription no matter what, I’d argue that breaking points exist.
Paying Disney $180 per year just to watch a few shows or movies, that are not really that good, or for entertaining your kids with Disney classics, sounds like it could be too expensive for quite a few already.
With that money, you could purchase DVD or Blu-Ray, preferably on the second hand market, and keep them forever. You find plenty of classic movies on sites like eBay, and if you like thrifting, flea markets or garage sales, you know that bargains can be made there. Not always, but there is a good chance.
Many might also switch back to something that has always existed, but has lost popularity since the advent of streaming services: sailing the seven seeks, aka, piracy.
Lastly, another viable model is to switch to 1-month subscriptions only. This works well, considering that most streaming services do not put out enough content to warrant a full-year subscription. It is possible, however, that streaming services will end the option eventually, if too many subscribers start using it.
Right now, subscriber counts do not really fall, despite the price increases in the previous years. But this will change eventually. Some subscribers might switch to ad-supported plans, which are cheaper, but these come with their own disadvantages (namely ads).
Now you: are you subscribed to a streaming service?
You’ve forgotten to add the price of an Internet connection which isn’t cheap these days either.
But I agree with you that DVDs are a much cheaper way of watching anything which Netflix churns out. You might have to wait a bit longer for the content to become available, but I noticed something odd yesterday when browsing the Amazon UK DVD catalogue. It would appear that movies that were only previously available on Amazon Prime are now becoming released on DVD and Blu-Ray. That’s good news indeed because I don’t subscribe to that either.
I’ve had to swallow the exhorbitant delivery charges of £10,57 plus £0,99 per kilogram, but there’s no way around that unfortunately. Still, Amazon UK does ship whatever I buy within a couple of days at the most.
The secondhand option is cheaper, but those marketplace resellers charge per disc even though they bundle them into one package and always dispatch them without a tracking number which in turn means that you’ll have to wait up to three weeks for your order to arrive, but at least it’s an alternative.
Streaming costs contiune to rise and will price subscribers out. I sub to one for the year on black friday sales last year was hulu at 99 cents per month. This year will probably be netflix if the price is similar. I also sub for a sinkge month to one of the other services a couple times per year only to watch or catch up on shows.
What I do not understand is why over the air tv is free, but you cannot free stream the local stations live feed. I live in a valley 35 miles for local stations and cannot get them over the air due to terrain, and can not free stream the local stations live tv feed for shows.
“What if the price of service does not justify its cost?”
I always like to mention the one factor that is left out in these blog entries condemning price hikes: yes, but what about the stock price? Because . . . the appreciation in stock price fully justifies the subscription price increases.
Playing with the figures:
The stock price of NFLX in 2010 was around $25/share; today the stock price, which has been falling precipitously over the last week, is $1,100/share. That’s a 4300% increase. (May as well pick up a share today because later in the month there is a beautiful stock split.)
During the same time, subscription prices have risen from around $8/month to $20/month. Or $100/year to $240/year. That’s a 140% increase. I see a wonderful difference in my favor with those numbers.
NFLX share price at the beginning of 2025 was around $880/share with a high for 2025 around $1300/share. For a layman in finances, who likes to stream using NFLX, it’s rather obvious that the $400 appreciation in share price pays for the yearly, premium subscription.
“Over the last 12 months, the stock’s price has increased 40.31%, with a year-to-date return of 22.82%.”
In January 2025, Netflix announced a modest increase for the standard, no commercial plan from $15.49 a month to $17.99–a 16% increase.
In other words, NFLX isn’t price gouging subscribers who are keen enough to pocket a share or two of the product at the beginning of the year (or long ago) when the streaming giant was showing all the signs of progress and profit. In fact, shareholders of NFLX basically receive a “free” subscription plus dividends and leftover share price appreciation.
Sounds like a deal to me!
Same with MSFT or AMZN or GOOG.
Disney+ is the worst case because HULU will be an add-on for Disney+ only. It is $38 a month if you just want Hulu. They are going to kill Hulu if they continue.
“(…) what happens when the bulk of subscribers can’t afford the subscription anymore?”
Same as with tobacco and other addictions: they find the money should it be by sacrificing or reducing on healthy and even fundamental needs (nutrition, holidays, sports …).
There definitely is addiction, and when it is not to the product it is to a psychological relief of feeling part of an unavoidable progress, like getting rid of a Kentucky accent when you want to make your way in New York City, here I come, here I am and … here I want to stay.
I personally am not concerned by streaming services, not because of the cost, not because I’d advocate living in a prehistorical environment and state of mind, but only because anything I feel as “too much” creates a distance with excitation: “Hey, come on in, there’s always a party on the Web” initiates here a form of seep disinterest. Business used to call you, then it pulled you, now it pushes: get in, come on, like in Japan where travelers get pushed into trains by dedicated workers. Not for me.
Confrontation to whatever product, be it free, always initiates three questions: do I need it, do I want it, and if wanted without being needed, will I still want it tomorrow? In my experience,
say 90% of the time I don’t need it, in the 10% remaining I differentiate a long-term wish from a short-term excitation motivated most of the time by advertisement, leaving the latter to a zero+ cause of adopting/buying the product.