While price hikes for subscription services might seem like a smart short-term solution to boost revenue and income, they tend to become more of a gamble in times of fractioning markets. This is especially true for the subscription video, or SVoD, sector where many traditional TV networks have launched their own streaming platforms in recent years. In the U.S., Netflix, Amazon and Disney dominate this industry, despite aggressive price increases by the latter two companies in the last six months. As our chart shows, only one major video streaming service didn't announce or implement higher costs for their standard plans.
The platform in question is Netflix, which kept the price for its standard ad-free plan steady since January 2022. This isn't to say that the company hasn't turned the screws in other areas. In October 2023, the streaming service raised the price for its Basic plan by $2 and for its Premium plan by $3, which is in line with the increase in costs for the standard plans of other providers. These price hikes coincided with Apple, Amazon and Disney all raising monthly fees by $3 in absolute terms, sometimes directly, sometimes by announcing add-ons to existing plans that will get rid of ads like in Amazon's case. Customers of Max, the SVoD offering by HBO, had to contend with an increase in pricing even earlier in the year, although the base cost of its standard plan had already been relatively high.
It remains to be seen if these price hikes, which most certainly won't be the last for the near future, manage to balance out other macroeconomic effects and market developments. For now, the companies behind the platforms seem optimistic. Disney, for example, claimed to be on track for profitability in its direct-to-consumer segment by the fourth fiscal quarter of 2024, despite losing 1.3 million subscribers in their core markets between October and December 2023.
