Why are all the Streaming Services Increasing Their Prices?

Viewers who are ditching the cable or satellite TV are looking towards variety of other services to offer them similar cable experience. This is normally sought from online streaming services. To begin with, these streaming services mostly begin with lower cost than you cable package. But gradually there has been a rise in the subscription prices of these online streaming services as well. It may feel as a discouragement to see how these services are hiking their price because one of the primary reasons for the cord cutters to go ahead with their decision was because of the hike in cable prices. Now consumers are also questioning this price hike and wonder if this would be a long term plan of these streaming services. As the industry matures and the growth in that sector slows down, the price hike is something that is unexpected. The main reason for the hike in prices is quite complicated one wherein there are varied factors that play a role for the increase.

  • Most of the online streaming service are either operating at low or breakeven for increasing the growth of consumers at their end. Launching of new services and the intense growth of subscriber has led to an increase in their marketing cost. Initially these streaming services had set up aggressive pricing strategy to outdo the other players but only half of them were just at breakeven.
  • When we talk about more number of channels, it means that much additional content is shown to the viewers. As per few of the online streaming companies, the rise in the prices was to cover up the cost of all those additional content or channels. More and more bundle of channels or shows are coming up on the streaming services for luring the customers. But when we talk about more shows then it means more cost to the viewers. There is a constant pressure on these companies to broadcast shows or content with the viewers want to watch. However, in a way, it can be justified that these online streaming companies are offering more value to their customers when they also increase the content. So if you are paying more, somewhere you are also able to view more number of shows.
  • Even with these price hikes which the cord cutters have seen, the profits which the online streaming services are getting is nothing in comparison to the profit earned by the cable and satellite operators. The charges are still less when compared to the cable TV.

You may still see some of the big brands hiking up the price as there are new and creative content appearing on their online streaming app. Though as a viewer, you may not find these charges cheaper compared to what they were some time back when you had just gone for them but this seems to be only the beginning of the price hike. Gradually if need be, these streaming companies would play around with the prices so as to stay ahead of the competition and get as many consumers as possible.