Disney+ and Hulu announced price increases this week, effective Oct. 17. Paramount+ will increase its rates starting on Aug. 20. Warner Bros. Discovery’s Max streaming channel raised prices in June, while Comcast’s Peacock service did so in July.
Bruce Leichtman, a TV industry analyst at Leichtman Research Group, said the rapid growth in streaming services has come to an end and that is driving prices higher. The COVID lockdown generated millions of new subscriptions as homebound consumers sought fresh viewing options. As a result, the streaming market “very quickly matured to the point of near saturation,” Leichtman said.
That means the streamers have only two options for growing revenues — selling ads or raising prices. And even ad-sponsored services are becoming more costly for consumers, reports The Boston Globe.
Max left the price of its ad-supported version unchanged at $9.95 a month or $99 a year. But its ad-free basic version has gone up from $15.99 a month or $149.99 a year to $16.99 a month or $169.99 a year. Prices also went up for the service’s “Ultimate” tier which offers higher video resolution.
Both Paramount+ and Peacock are raising their ad-supported price from $5.99 to $7.99 a month. Ad-free Paramount+ goes up one dollar to $12.99 a month, while Peacock rises from $11.99 to $13.99 a month.
Put another way, a consumer who paid for the ad-free versions of all these services must pay an extra $7 a month after all the price increases. That’s what a subscription to Disney+ cost when the service was launched in 2019.
The average US household already subscribes to four such services, compared to three in 2020. Leichtman said it’s just a matter of time before industry leader Netflix jacks up its rates as well.
Beginning next year, Leichtman noted, Netflix will no longer reveal to investors how many subscribers it has, It will just report how much revenue the company is collecting.
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