As Netflix raises its streaming prices yet again, many consumers are starting to notice a troubling trend: streaming services are going the way of cable television. Yet this may not be true moving forward, as competition is about to heat up regarding the streaming services that are available. The future of streaming may very well depend on the next couple of years.
Ultimately, the plan for streaming networks was likely always to raise their prices to be approximately the equivalent of cable. Once consumer buy-in was acquired — once customers were used to streaming services — streaming services could raise their prices to the amount customers were willing to pay. They already knew how much customers were willing to pay: they had already been paying for cable.
In other words, once streaming became the most ubiquitous, popular, and convenient service, streaming companies could start raising their prices to be the equivalent of what customers were already used to paying for their entertainment. This has been seen in many of the changes taking place.
Streaming services now have bundles and packages for “premium channels,” just like cable companies once did. These are expensive subscriptions to services such as HBO or sports stations.
Streaming services now have expensive, live television bundles. Hulu Live is essentially a cable subscription in and of itself; the market has reinvented television.
Streaming services are starting to slowly cream up in cost. Netflix has raised its prices several times recently, likely testing out the market for future costs. This isn’t surprising: Netflix also spent a lot of money on its premium content.
And while streaming services are becoming more like cable, cable television is becoming more like streaming. Most cable networks have now developed their own streaming services and streaming packages, and the market is becoming confusing for the customer. Many customers now need to maintain multiple streaming accounts and need to check multiple streaming accounts to find out where the shows they want to watch are. Many currently running shows have their past catalogs on one streaming service and their current episodes on another.
As streaming services continue to become more expensive, they also become more competitive. Yet rather than race to the bottom, it’s in the best interest of many of these companies to maintain a targeted price point. Otherwise, they could all lose money.
But there’s one company that doesn’t care about this: and that’s Disney. Disney’s Disney+ streaming service is set to debut this year, and it’s expected to be less expensive than Netflix. Disney+ is going to be a game changer, as Disney currently owns the IPs of… well, just about every item of entertainment out there. After the acquisition of Fox, Disney gained creative rights to about half of known media.
That means that Disney is going to be able to produce some pretty compelling premium content, as well as confusing the market even further: it’s another streaming service that consumers may need to purchase. Altogether, streaming services, on average, and bundled, may start costing consumers either the equivalent of an old cable plan or even more. So much for cord cutting.
Of course, that doesn’t mean that the changes to the streaming industry are altogether negative. Large volumes of spectacularly good content are being produced, and much of this content is challenging and unique in a way that cable television could not be. Netflix has been experimenting with new types of media such as interactive movies, while other services have been introducing ways to watch movies with friends.
Streaming services are going to need to work harder to distinguish themselves from other services, and consumers may need to start being very savvy about the number of subscriptions they want to keep and whether they want to invest in the new services that are surely coming. At some point, companies will also need to iron out the issues related to each cable network having their own streaming services as well, the industry is currently scattered and chaotic to the point of being confusing.
Regards,
Ethan Warrick
Editor
Wealth Authority
