Streaming TV costs higher than cable, as ‘crash’ finally hits

Streaming TV costs higher than cable, as ‘crash’ finally hits, says a new analysis. It follows warnings that a “crash” was on the way – a day that has now arrived.

The report says that after price rises by Apple TV+, HBO Max, Disney, Hulu, and others, the total cost of a basket of popular streaming TV services has now hit $87 per month …

Streaming TV Costs

Streaming TV promised customers greater flexibility at a lower cost – and for a long time delivered just that. Millions of customers closed their cable TV accounts in favor of streaming, thanks to the ease of doing so on smart TVs and using TV boxes like Apple TV.

However, media execs acknowledged that the prices being charged by streaming services were unsustainable, and that a “crash” would follow – where companies would be forced to increase prices or go out of business. That day has been growing steadily closer, as streaming prices steadily increased over time.

The streaming crash has now happened

As little as a year ago, a popular set of streaming services added up to a total cost of $73 per month – compared to $83 for an equivalent cable package. But the latest round of streaming price increases has pushed that cost to $87, says a Financial Times analysis, making it more expensive than cable.

Apple TV+ was one of the first services to see a price rise, back in October of last year, increasing from $4.99 to $6.99 – a 40% hike.

Disney followed in December, with an increase of 25%, from $7.99 to $10.99 for Disney+ Basic. The price was increased again just last month, to $13.99. That amounts to a total increase of 75% in less than a year!

Hulu pricing was increased at the same time, the ad-free tier rising by 20% from $14.99 to $17.99.

Warner Bros. in January increased HBO Max pricing from $15 to $16, and Netflix last month dropped the Netflix Basic tier from its lineup for new or switching subscribers, more than doubling the effective cost.

Companies including Netflix and Disney are also cracking down on password-sharing, further increasing costs for some families.

Streaming companies fighting for survival

The FT says that the increases were inevitable, as streaming companies were making heavy losses in their desire to persuade people to switch from cable.

But privately, media executives [had] warned of a looming “car crash” as they splashed out tens of billions of dollars on TV shows and films […]

As interest rates have soared over the past year and a half, the crash has arrived. Media stocks have suffered a bruising correction as Wall Street grew impatient with the heavy streaming losses.

That saw the stock values of Warner Bros. and Disney more than halve.

Streaming companies will point to cheaper ad-funded tiers, but of course eliminating ad breaks was part of the attraction in the first place. They may also find it harder to retain subscribers as the Hollywood writers’ strike sees a fall in new content.

What’s your take on the price rises? Is it leading you to reevaluate your streaming packages? Let us know in the comments.

News Source: 9to5mac