December 2, 2020
3 Reasons Why Streaming Service Prices Keep Rising

Why Do Streaming Service Prices Keep Rising Even though there’s More Choices than Ever?

There there are more streaming choices than ever before, but that hasn’t stopped prices from going up time and time again; here’s why it keeps happening…

Netflix. YouTube TV. Hulu. Disney+. Amazon Prime Video. The list goes on and on, and there are even more to come. Everyone knows that when there’s an abundance of a product or service, the cost of that product or service goes down. It’s simple supply and demand economics. But, if that’s true, why do streaming platforms keep on raising their monthly subscription fees?

Turns out, there are understandable answers as to why this is occurring. More particularly, there are three principal factors are driving this price-hiking phenomenon. Unsurprisingly, the proverbial devil is in the details.

3 Reasons Why Streaming Service Prices Keep Rising

Let’s take YouTube TV as an example. Introduced in February 2017, the streaming service by Google cost only $35 per month. That price eventually rose to $50 per month, and now it’s up to $65. (Hulu and Netflix have also incrementally raised their prices, as well.)

So, why does this keep happening, despite the fact there are more streaming providers than ever? Aren’t prices supposed to go down when there there’s a bigger selection among consumers? Usually, yes. But that’s not the case in this instance. Here are the three biggest factors behind the price increases:

  • Licensing content. Every streaming platform licenses content from movie studios and television networks. And those content creators like to get their money’s worth for such deals. How much? Well, it cost Netflix an eye-popping $500 million to get the rights to Seinfeld, which will stream on the platform next year. While this is certainly an extreme example, networks and studios aren’t exactly giving their content away at bargain basement prices.
  • Original content creation. Licensed content in a streaming service’s catalog won’t suffice to retain customers or even attract new subscribers. So, original content is a necessity and that necessity is very expensive. For instance, Netflix will spend approximately $17 billion dollars this year alone on its original content.
  • Networks prefer bundling channels. Networks don’t like to parcel out there properties in singles or even doubles. They would rather sell them in large packages. Of course, that ups the price and that expense is partly passed on to the customer.

There is a fourth reason — it costs more money to host bigger content libraries. Server space is yet another expense, as is the cost of hiring, training, and retaining employees.

Owen E. Richason IV

Covers social media, apps, search and like news. History buff, movie and theme park lover. Blessed dad and husband. Owen is also a musician and is the founder of Groove Modes.          

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