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?