Leaked Financials Reveals Reasons for Streaming Price Hikes

When Netflix was once the king of video streaming services, we didn’t know how good we had it. All the movies and series we wanted from one subscription, and at a price that couldn’t be beaten. Today, we wish we could be so lucky. The modern market is more expensive than ever, with media separated over many different services. Now, with data leaked from some of the biggest players in streaming, we have a better idea of why this happens, and why it’s unlikely to change anytime soon.

A Solved Problem

Before getting into why streaming costs are increasing, it’s important to understand that the issues it presents are largely solved in other forms of media. The best example here comes from online casino titles, as illustrated by Paddy Power blackjack games. These titles, such as Premium Blackjack and Blackjack 14, start with a low minimum buy-in, and then let players customize their engagement with larger bets if that’s what they prefer. This applies to mobile and desktop systems, and it’s something that streaming services avoid.

As a replacement, streaming services operate in tiers that constantly increase cost and reduce user choice. Netflix is a prime example, increasing its minimum price two years in a row (so far) without offering advantages to offset this cost. More flexible plans could help here, but they’re unlikely to appear.

What Caused the Price Hikes

According to leaked financials as noted at Ars Technica, price hikes appear to have started as a way to break even. Many of these companies offering widespread tech solutions often start at a loss, attempting to corner a market before they try to break even. This is essentially a case of investing in the future, where the inevitable result is a more expensive outcome for users.

This is bolstered by the type of competition that these companies invest in. Thanks to developing their own shows, the financial burdens on streaming services continue to grow. The Acolyte, for example, cost around $180 million to make, and Andor cost around $250 million. To recuperate this cost through the streaming division, the most obvious solution is to again pass the price hikes on to the customers.

Cause and Effect

From a business perspective, increasing costs like streaming services have done makes perfect sense. From the perspective of the consumer, however, it seems more like pushing the burden of competition onto the users. Customers don’t force big media companies to operate at a loss, but customers suffer the eventual cost. Customers also don’t force streaming companies to create expensive shows, but again, customers suffer the inevitable cost of media companies’ decisions.

Though customers are growing increasingly frustrated with price hikes and other anti-consumer practices like a crackdown on the formerly useful account sharing from streaming services, these companies don’t appear to be slowing down. They’ve become so entrenched in our culture that many of us are willing to go along for the ride, which is only really encouraging the situation to worsen. It’s not the ending we hoped for, but if things are going to get better, they’re first going to have to get worse, and probably to a rather frustrating degree.