The Streaming Services That Are Priced Right – and the Ones That Miss the Mark
In an inflationary environment, it’s important to understand which streaming services will have the leeway to charge consumers more. The main value streaming video on-demand services (SVODs), offer their subscribers is a collection of content they wish to view for a recurring subscription fee. The key point being that it isn’t just catalog size that makes subscribers value a platform but how desirable that content is. That’s why demand is important to understanding what price point a platform should set to be a compelling deal for subscribers and stay competitive with other platforms. We see a clear relationship between the total demand for content on each platform (movies and TV series) and the price point each platform charges consumers.
Streamers are raising prices and consumers have tighter budgets. This will make it difficult to balance rising costs with avoiding subscriber churn. With Wall Street’s focus on these platforms shifting from simply looking at net subscriber adds to scrutinizing streaming revenue, the ability to charge consumers more will help these streamers move towards becoming profitable.
Also, read:
How the Streamers’ Movie Catalogs Stack Up, According to Demand | Charts
As far as stand-alone platforms go, Netflix’s Standard tier looks like a great value for subscribers and offers a more in-demand catalog than we would expect at its $15.99 price point, according to Parrot Analytics‘ data, which takes into account consumer research, streaming, downloads and social media, among other engagement.
Discovery+ is at the opposite end of the price spectrum, at $6.99/month. However, it is still a very affordable tier that is ad-free and has a lot of demand for its catalog.
Showtime’s $10.99 price tag seems excessive for the number of content it offers subscribers. Comparing Starz and Showtime, Starz looks to be providing the most value between these two premium cable channels-turned-streaming platforms. Starz, in comparison to Showtime offers subscribers a platform that features movies and shows with 27% higher demand and costs 18% less than Showtime.
Disney+ launched its new ad supported tier and Disney+ premium tier at $10.99/month. Given the high demand for content on Disney+’s platform, this seems to be a fair price.
Apple TV+ increased its price in October for the first time since the platform launched (from $4.99 to $6.99). The chart illustrates how the price increase has moved Apple TV+ just to the wrong side “priced right” line. While the price increase now makes it slightly more expensive than would be expected given its catalog demand, it’s important to remember that the Apple TV+ catalog is built from exclusive originals which serve as a more powerful incentive for subscribers to sign up. Apple is likely to charge more for exclusive content than any platform that has a similar demand.
It’s interesting to see how bundle options are priced. Although the Disney+/Hulu/ESPN+ bundle may be the most expensive option, it fulfills its promise to subscribers and delivers a high-demand catalogue of movies and shows. Hulu and Disney+, on their own, are priced as you would expect considering the amount of demand for their catalogs. Bundled services deliver higher demand than expected at their price point. This bundle is an example of a well-priced bundle that should encourage subscribers to upgrade from one platform.
Compare the Paramount+/Showtime Bundle to Disney+/Hulu/ESPN+. Paramount+ is an attractive option, but the extra cost of Showtime makes it seem overpriced.
Christofer Hamilton, a senior insight analyst at Parrot Analytics and a WrapPRO partner, is Christofer. More information from Parrot Analytics visit the Data and Analysis Hub.
Also, read:
HBO Max’s Latest Show Cuts Are Making a Dent Without ‘House of the Dragon’ for Cover | Charts