Cutting the cord was supposed to be our cheap future — then came the price hikes
Another week, another price hike or two. Originally, the best streaming services and best cable TV alternatives felt better than this. We cut the cord to get away from cable and its titanic bills.
Now, the burden continues to increase on the customers, all the while we hear that actors and writers make pittances from shows and movies on streaming compared to the studios and services. Mandy Moore, for example, said she only got pennies for This Is Us.
So, what the heck is going on? Most recently, we saw Peacock raise its monthly bill by $1 ($5 to $6) and YouTube Premium go up by $2 ($12 to $14). Except if you're a long-time YouTube Premium subscriber, and you're seeing a price increase of as much as $4 per month — as I am.
Don't get me wrong, I'm not un-cutting the cord, but it's a good a time as any to look at the streaming landscape to re-examine how we got here.
Lots of price hikes add up
Looking back at the price changes over the last five years, you can see increases of up to 82% from the likes of YouTube TV, but also 60% from Sling and 41% from Netflix. And all but three of the below services have avoided raising rates faster than the 21.5% rate of inflation from 2018 to 2023.
Most of those services have only raised prices by small increments at a time, in order to avoid sticker shock. Sometimes it's by $1 (Peacock) or $2 (Apple TV Plus).
But then there's Sling TV, a titan among the cord-cutter options, which gave me two price-hikes in the last year or so. The first $5 increase had no new perk to explain the price, and the second $5 bump happened because I was in a market getting ABC — and I couldn't opt out of that because I had Sling Blue. I got Sling because I wanted the most-affordable option, and because I didn't need ABC (I use Hulu for Abbott Elementary, anyway).
That was the rare exception to how Sling is more user-customizable than other services. For example, don't get me started on how Fubo's started charging people at least $11 per month for regional sports networks, even if you don't want them.
Other times, they pull a weird trick by keeping the price the same but taking away features, like how Disney Plus kept its $8 price, if you were OK with ads. Or how HBO Max kept its $16 price when it became Max, but moved 4K plus Dolby Vision and Atmos into a new $20 tier.
My best advice with all of this is, unfortunately, a lot like homework. I have a spreadsheet I check monthly, if not more frequently. Every time I do, I think "are these services giving me enough bang for my buck?"
Looking up prices, making a spreadsheet and setting reminders to audit your purchases may sound like work, but it's a free and private option. That's more than I can say for services such as Rocket Money, which charges between $3 (annual) to $12 (monthly) per month to audit your purchases for you.
Why is this happening?
Remember when Disney Plus first arrived, with the promise of the whole Disney library for just $7.99 per month? It seemed unreal, right? Well we now know why our gut instincts were right: Disney Plus has never been profitable, a common financial situation among streaming services that's recently come under fire on Wall Street.
So, the streaming services took every option they could, starting by shaking all the money out of the customers that can be done. Most visibly, that comes with the above price increases. Then, there's the rise of ad-supported paid streaming services, as we saw Netflix and Max (then HBO Max) find other people (advertisers) to pay them. Oh, and then there's the Netflix password-sharing crackdown, which seems to have paid off.
Not to mention the "cost-cutting" tactics of dumping content to make money on free ad-supported services, canceling movies and not paying writers and actors a fair wage.
In short, either these services are too cheap for what they cost, or the books aren't being balanced well enough. Probably both.
Outlook: We need to churn, if only to prove a point
Did you ever learn about a word only to find out you already knew about it? The concept of 'churn' is probably familiar to many beyond the industry insiders who pepper it into their presentations. Right now, it's hard to afford all of the streaming services you want, and so you will probably cancel some and come back later.
For example those who weren't dying to watch Secret Invasion on Disney Plus were probably waiting for next week when the whole series will be available. Unless the lack of word of mouth has already killed that impulse. Then, there's some who don't like Netflix's split-season release model, and are waiting for The Witcher season 3 to all be out at the end of this month.
The execs responsible for all of these decisions hate churn, as it makes their income less reliable. But right now, it's the best way to send a message that the string of price hikes is untenable for the customer.
YouTube TV's significant price increase over the last 5 years didn't come without some improvements, it only boasted "over 50 networks" in 2018, and now packs over 100. But do we need these services to grow to that size? Wouldn't a cheaper YouTube TV (hi, Sling) be better? Maybe YouTube TV could introduce a 'lite' tier so we can find out for ourselves.
