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Streaming services are now getting out of hand

Updated: May 19


Increasing prices of Netflix, Amazon prime

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The email arrived late last year, a harbinger of a new era. Disney+ was jacking up their annual plan to a whopping $140. It wasn't an isolated incident. Netflix announced their cheapest tier would now come bundled with ads, Amazon Prime would be $3, TV went from $66.99 to $99.9 a month there are so many great things to watch and they're all spread across so many different Services. I want to watch them all but man does it hurt to Fork up so much money every month to do it it kind of makes you wonder how did we all end up in this position? where we're paying so much for streaming every month and maybe more importantly can we as consumers do any better.


The answer lies in the strategies of the streaming giants themselves. Take Netflix, the industry leader. Traditionally, their revenue relied solely on subscriber growth. This meant either attracting new viewers or raising prices on existing ones. A 2021 New York Times article reveals a gamble taken by Netflix's CEO: attracting subscribers and raising prices faster than their debt accumulated. It worked for a while, with subscriber numbers steadily climbing alongside price hikes. 


Graph showing Netflix's revenue over the years

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Pandemic the crackdown on password sharing:

Then came the global pandemic. 2020 saw a surge in Netflix subscriptions, unsurprisingly their best year ever. However, as the world reopened, growth stagnated. Panic set in at Netflix HQ. They realized a saturation point had been reached. Password sharing, once viewed as a marketing tool, was now a financial burden. Their solution? Crack down on sharing and introduce an ad-supported tier at a lower price point. 


While ad-supported tiers like Hulu's $5.99 option have proven successful, most streaming services remain unprofitable. Launched with massive investments to compete with Netflix, these companies are burdened by debt and struggling to find a balance between subscriber growth and revenue. Price hikes and ad insertions are attempts to become profitable, but the convenience of streaming comes at a cost. Viewers are left navigating a complex and expensive landscape, with some resorting to "serial churning" - subscribing and unsubscribing based on what they want to watch - to manage their budgets. 


But the ad model isn't a magic bullet. Despite soaring prices and intrusive ads, most streaming services remain unprofitable. The culprit? A mad dash to dethrone Netflix. New services launched with billions of dollars in investments, attempting to condense 15 years of Netflix's development into a few short years. This rapid expansion proved incredibly expensive.


Rising streaming costs threaten the very freedom they promised. Price hikes from Disney+, Netflix, and even Amazon Prime reflect slowing subscriber growth for giants like Netflix. Their aggressive strategy of attracting new viewers while accumulating debt backfired. The pandemic provided a temporary boost, but with growth stagnant, companies are resorting to ad-supported tiers and password sharing crackdowns.


However, profitability remains elusive. New services, launched with massive investments to compete with Netflix, are burdened by debt from trying to condense 15 years of development into a few.  


So, what are viewers to do? Sticking with all services is expensive. "Serial churners" subscribe and unsubscribe based on their monthly needs, offering a way to save money but requiring constant management. A "middle ground" approach involves subscribing to a few core services while rotating through others. 


The convenience of streaming has undoubtedly changed. We've entered a strange, expensive era. Perhaps it's time to re-evaluate our streaming habits and find a strategy that works for our budgets and viewing preferences. After all, streaming was supposed to liberate us from the tyranny of cable, not become a new financial burden.




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