“Streamflation” has been a hot topic with streaming subscribers recently amid a slew of price hikes by media companies like Walt Disney Co., which raised the price of its Disney+ and Hulu streaming services yet again in August.
Yet escalating prices don’t seem to be scaring away consumers; in fact, they’re subscribing, and spending, more than ever. Spending on streaming services in January 2024 spiked more than 70% from 2021, while the share of households paying over $100 a month has more than doubled, according to a new Bank of America report.
Conversely, the share of households spending less than $20 dropped by 16% over the same time period.
“Millennials and Gen Xers are paying more per household on streaming as they are paying for multiple streaming subscriptions,” the report said. “These cohorts have also seen the largest share increases of those streaming over the past three years.”
Clayton Durant is an enthusiastic subscriber to Apple One (the bundle for Apple Music and AppleTV+), Spotify
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Disney, Netflix, Peacock, ESPN+ and Crunchyroll — and he intends on staying, price hikes and all.
“Netflix, I know they are hiking up their prices and plan to again but I don’t plan on leaving their service. They have a lot of great shows, and I am a big fan of their documentaries,” Durant said in a message. “For Disney, it would take a much larger price bump than they already set into motion for me to jump off their platform simply because I am a massive fan of their legacy [content] like ‘Star Wars’ and ‘Indiana Jones.’”
The enduring appeal of streaming services from the likes of Disney
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Netflix Inc.
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Amazon.com Inc.
AMZN,
Comcast Corp.
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Apple Inc.
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Warner Bros. Discovery Inc.
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and others belies price increases in the U.S. by at least seven major streaming services over the last year. Indeed, the average cost of watching a major ad-free streaming service has risen nearly 25% in about a year, according to a Wall Street Journal analysis.
The steady stream of price increases underscore the latest phase in the streaming wars, analysts say, after years of the combatants offering low-cost packages in the pursuit of gaining customers.
But after absorbing billions of dollars in losses, the major streaming services are now hiking prices and cracking down on password sharing in the pursuit of profits.
“It’s an acceleration of the shift away from traditional TV viewing via cable and satellite. As consumers we may not like paying for it, but the growth will continue because we are following high-quality video content, which is now predominantly distributed through streaming apps,” Jacqueline Corbelli, chief executive of BrightLine Partners, said in an email.
“Ad-supported bundles lower the access cost and feeds the flow, ironically,” she added.
Mark Vena, CEO and principal analyst at SmartTech Research, said he isn’t sure American consumers are willing to fork over more than $100 a month on streaming content for an extended period of time.
“Given the crowded nature of the streaming content space and continued inflation concerns, my guess is where we’re going to see even more consolidation space, potentially resulting in many of the big players offering more bundles,” Vena said in an email.
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