Since the last time we looked at the pricing landscape of streaming platforms in the U.S., several streamers have raised their prices. At the same time, the platforms and the bundles that were already providing some of the best value to subscribers have held prices steady. This has resulted in a widening gap between the “best value” platforms and smaller platforms that have raised prices but perhaps have not increased the amount of in-demand content they have to offer subscribers.
Platform subscription cost, pricing structure (eg. does a platform have an ad-supported tier), and catalog demand-to-price ratio are a few factors that contribute to a platform’s value perception. These features inform our Streaming Economics model and understanding them can help give a sense of how these platforms will ultimately perform in key financial metrics like revenue and churn.
Netflix has kept the price of its Standard tier at $15.49 since 2022. As competitors have raised their prices more recently, this has only made Netflix look like a better deal for subscribers relative to the competition. There are two likely paths forward from here. Either the spread in price vs. catalog demand will give Netflix space to be confident in raising the price of its Standard plan or if Netflix continues to hold its price at this level it could limit how high competitors can raise prices and remain competitive.
The Disney+/Hulu Bundle is another offering that has not raised prices recently and continues to be a great value for subscribers in terms of demand per subscription dollar. The relative pricing of Disney platforms and bundles is an interesting case study in how companies can juggle complementary services. It has consistently been the case that the standalone Disney+ and Hulu subscriptions have been some of the pricier options for consumers on a demand per dollar basis.
As of Oct. 17, Disney raised the monthly price of its ad-free Hulu and Disney+ subscriptions to $18.99 and $15.99 respectively. However, the price of the ad-free Disney+/Hulu bundle stayed the same. This only strengthens the incentive for standalone platform subscribers to upgrade to the bundled option. It is a savvy tactic from Disney that should increase average revenue per user (ARPU). If subscribers want to only pay for one service they will be forced to pay a premium, but if they upgrade to the tantalizingly priced bundle they will still end up paying more in total.
Peacock and Paramount+ both raised their prices – In July a $2 increase for Peacock Premium Plus to $14/mo. and in August a $1 increase for Paramount+ with Showtime to $13/mo. Both still look fairly priced given what they are offering consumers. The now slightly higher price for Peacock also appears justified because there is more demand for its catalog than for Paramount+, enough that we would expect it to be priced about $1 more. These platforms may be competing at a similar price point and with similarly in-demand catalogs but the audiences for their content are still different with Peacock’s audience skewing female while Paramount+ has a more male leaning audience.
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