‘Streamflation’ Is Becoming the New Streaming Norm

As we witness a major change in the realm of entertainment streaming, the biggest names in streaming services have marked 2023 with extensive changes to their pricing plans, especially their ad-free bundles. In the words of Ted Jenkin, CEO of oXYGen Financial in Atlanta, we are in the era of “streamflation.” Companies are simultaneously pursuing profits and subscribers, leading to a steady increase in prices until enough subscribers abandon the platform. Until such an event occurs, consumers can expect consistent price hikes from all streaming platforms, potentially matching the cost of traditional cable bills.

Netflix’s New Pricing Model

In October, Netflix revised its pricing for two of its ad-free plans: the basic and the premium. The premium plan saw a jump from $19.99 to a whopping $22.99 per month. Interestingly, Netflix’s profits in the third quarter surpassed forecasts, a result attributed to the company’s initiative to reinforce restrictions on password sharing.

Netflix eliminated its conventional $11.99 ad-free subscription in November, replacing it with a new set of packages. The streaming service introduced a standard ad-supported plan for $6.99 per month and a standard ad-free plan for $15.49 per month. The updated ad-free package also presents an option to add an extra family member located outside the user’s household, in line with the company’s latest policy to prevent password distribution outside of a single household.

Disney’s Strategic Pricing for Hulu and Disney+

Disney, on the other hand, increased its price for Hulu’s ad-free subscription from $14.99 to $17.99 in October, a move CEO Bob Iger hopes will drive customers toward the ad-supported packages. Disney also amped up the price for its exclusive streaming service, Disney+, by $3, which now costs $13.99. In addition to standalone services, Disney also offers bundled plans for Hulu, Disney+, and ESPN+.

AppleTV+ and Amazon Prime Video Follow Suit

October also saw an increase of $3 in AppleTV+’s cost, which was in sync with Apple’s decision to raise the prices for some of its other services. These include Apple Arcade, Apple News+, and Apple One, which provides bundles of Apple subscriptions and cloud storage.

In a surprising turn of events, Amazon announced that Prime Video TV shows and movies would start featuring ads starting in 2024. However, subscribers have the option to pay an extra $2.99 per month for an ad-free viewing experience.

Other Major Price Revamps

Earlier in 2023, Max, Paramount+, and Peacock all increased their prices. Max bumped its monthly rate for its ad-free subscription from $14.99 to $15.99 in January and introduced a more expensive plan after its merger with Discovery+. Paramount+ also announced a price increase in September, as CEO Bob Bakish warned subscribers of more impending hikes in the coming years.

Taking into account these developments, the total cost for ad-free subscriptions to Disney+, Hulu, Netflix, Max, and Prime Video would have been around $50 per month at their initial price points, according to CNBC. However, their current rates take the total to over $80 per month, marking a significant leap in the cost of streaming content.