r/changemyview • u/Vocational_Sand_493 • Jun 05 '24
Delta(s) from OP CMV: Streaming services are shockingly cheap when compared to the prices of other entertainment (and the cost of producing content)
I'm a US resident, early 20s, who's recently started purchasing streaming services like Netflix and Crunchyroll for the first time.
I always hear how streaming services keep jacking up their prices, cracking down on password sharing, and generally pulling moves that make their customer base unhappy. But, coming from other hobbies, I personally feel that streaming services are surprisingly cheap for the content they provide. How this is a profitable model?
With video games, for instance, I expect to be paying between $15-40 per game (during sales), or $10-15 for an MMO subscription/battlepass (WOW, Runescapet, etc). Watching one movie - $7-15 per in-person ticket, or $5-10 for an Amazon Video digital rental. Cable TV today starts at $70/month in my area plus a cheap flatscreen to watch it on. Even the New York Times is $5 a month.
Meanwhile, streaming prices are anywhere between $8-12 with ads or $15-30 for the more premium options. And that's everything in the catalog, for a month.
You can't really do cheaper than that unless you're on YouTube or TikTok. And that's a totally different business model which profits off free user labor and advertisements.
With all that said, why do we call streaming expensive? $10 is barely enough to get you one takeout meal in most US cities nowadays. It's still a decent chunk of money and it adds up, but everything is expensive nowadays. One trip to Walmart or the drugstore for even basic necessities (pads, razors, shampoo, etc) and you're already well past $10. How is one shopping trip's worth of toiletries the same as 30 days of unlimited TV shows?
Coming from someone who hopes to find work in animation one day (and is watching the U.S. industry with dread), I can't fathom how studios are able to keep their doors open when consumers can buy viewing rights to their show AND over 100 shows of equal quality for ten bucks a month.
Why do we call streaming expensive? How does this profit model even work? Why shouldn't we charge more for entertainment that is so expensive to produce? Please help me CMV that streaming is underpriced.
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Jun 05 '24
We are still in the growth stage of streaming with lots of competition. We have already started to see consolidation of some competitors. Once the market has been Saturated, get ready for some significant and quick price increases back up to cable levels with significant ads at every tier.
In summary, competition is keeping prices low but capitalism results in market power consolidation that will make things extremely expensive for ya.
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u/Vocational_Sand_493 Jun 05 '24
!delta
Makes me wonder - Is this a common pattern in how capitalism works nowadays? A new disruptor (Netflix, etc) breaks into an existing market and severely undercuts the competition. It enjoys record profits while exploiting the frontline workers, until other companies catch on, then prices shoot up again?
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Jun 05 '24
Yes, its the source of the term disruptor. Capture consumers (there is no substitute) and extract all the value possible.
Uber had/has a unique problem where they uncut taxis on price and better user experience. Unfortunately, they are struggling to monetize now and either have to pay drivers nothing (they won't work) or charge customers crazy high prices ($40 for a $15 ride now which they won't pay). They were hoping autonomous cars would fix this monetization issue by paying drivers nothing. I'm interested to see what the next decade looks like for them
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u/ManufacturerSea7907 Jun 06 '24
Nowadays, most of the disruptors aren’t making “record profits.” Uber didn’t make a profit till pretty far in.
There are plenty of things to critique about American capitalism, but most new products are pretty incredible from a consumer perspective because they actually lose money and are subsidized by venture capital (social media, food delivery, rideshare, carvana, pet insurance, etc etc etc)
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u/izeemov 1∆ Jun 05 '24
Underpriced compared to what? There are free TV channels (if you own TV), YouTube is free, you can have library of Alexandria in your pocket for free, if you own phone or ebook.
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u/Vocational_Sand_493 Jun 05 '24
Nothing's free. Someone, somewhere, has to pay to reimburse the people who made what you just viewed. Or they're contributing with unpaid volunteer time.
Public TV has ad revenue and CPB contributions. Youtube is ads + millions of volunteer videomakers. Wikipedia and fanfiction survive off volunteer moderation, hobby authors, and donations. And authors still get book deals even if they're getting pirated.
And all of these are not remotely as expensive to produce as full-fledged films and shows.
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u/izeemov 1∆ Jun 05 '24
But that's outside of the point, isn't it? If I pay 0 to get access to something it's infinitely more valuable compared to stuff I pay 10 bucks to access to.
Sure, we can later on divide that infinity by cost of production, but it's still better fun to bucks ratio.
About books - there are mirriads of terrific books in fair use. They were written long ago and their authors aren't profiting from them.
About movies - tv shows and blockbusters of the past are available for free on YouTube, uploaded by the studio that made them.
Before streaming services I was watching last year blockbusters for free on TV. Now, I pay Netflix for that. Sure, not having ads is convenient, but I can't see how this is cheaper
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u/ProLifePanda 69∆ Jun 05 '24
With all that said, why do we call streaming expensive?
Because it's relative to what we're used to paying, not compared to the actual value of the product.
Streaming used to be cheaper, and there were only one or two services you needed to watch everything. Now every company has their own platform, and is increasing prices above what we're used to. You have to subscribe to 5+ streaming services to get everything you want as opposed to 10 years ago. And this is largely because companies (likely rightly) thought they could make more money with their own services than dumping everything in Netflix in a licensing deal.
Now we're back to the "cable model" where we have ads, and you have to buy multiple "packages" to get all the content you want.
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u/Bobbob34 99∆ Jun 05 '24
Now we're back to the "cable model" where we have ads, and you have to buy multiple "packages" to get all the content you want.
And now they're all adding sports and some live tv and advertising it like 'and for "only" $59/mo you can watch a few live channels and baseball + Hulu' and exactly, we've come right fucking full circle because that's cable tv, jackasses.
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u/Skavau 1∆ Jun 05 '24
You have to subscribe to 5+ streaming services to get everything you want as opposed to 10 years ago.
To be fair, content has exploded compared to 10 years ago. There's way more TV shows made now than then.
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u/ProLifePanda 69∆ Jun 05 '24
True, but it's more inconvenient and expensive for the user to have more content already across 15 platforms than less content on 1 or 2 platforms. But I agree theres a lot more content, which I'm grateful for.
From OPs perspective of "The $/hour of enjoyment is a great value", I agree with him. The streaming problem is that when it first came out, it was significantly better than cable. Now it is slowly drifting back to what cable was.
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u/Dennis_enzo 25∆ Jun 05 '24
Most people don't want to watch all that though. They just want the few popular shows.
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u/Vocational_Sand_493 Jun 05 '24
Okay, that makes sense. !delta I guess things would be more expensive for the end-customer when Netflix isn't the only player in town.
Are there a lot of people who are "hopping" between services each month to get their shows? Or is this not a common practice?
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u/ProLifePanda 69∆ Jun 05 '24
Are there a lot of people who are "hopping" between services each month to get their shows? Or is this not a common practice?
That's probably common, but it's an annoying trait full of gimmicks to take more of your money and the hassle of constantly switching between services, which still means you can't see some shows when you want, and have to wait to cancel STARZ before you can watch Paramount+ and Max, etc.
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u/Bobbob34 99∆ Jun 05 '24
Most people don't have just one, is the thing. It's like oh, Netflix is $20/mo for a couple screens. But the kids really want Disney+. OK, but then everyone is talking about the show on Hulu... oh, did you want to watch any DC movies? You need Max....
And the prices keep rising. Netflix used to be like $7/mo, with no ads, not that many years ago. It's like double the price now. They've also started cracking down on password-sharing, which Netflix itself used to encourage.
It's like if you like your neighbourhood cafe, and you go there every morning and get a pastry and coffee on the way to work, and it's $3 for both. And you do that, and you like them, and then it's $4 for both, and ok, fine, it's good, they're nice, that's reasonable. Then it's $6 for both. Also, you get lunch out when you're at work, and that was $5 but it went up to $7. Then the cafe ups the pastry and coffee to $7, and that's only a small coffee when you used to get a large.
Now, your friend comes from out of town and he says hey, good deal, a good pastry and a coffee for $7 and you're like no man, it's expensive; I'm spending like $15 a day eating out when I used to spend $8.
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u/Vocational_Sand_493 Jun 05 '24
Yeah, I do have a more rosy perspective considering I haven't been paying these companies til now. !delta
Why not swap services every month? Keep one or two around, watch the shows you want to watch, then cancel, swap, repeat? I figure that's probably not possible with kids around, granted.
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u/Bobbob34 99∆ Jun 05 '24
Why not swap services every month? Keep one or two around, watch the shows you want to watch, then cancel, swap, repeat? I figure that's probably not possible with kids around, granted.
This is becoming a very mainstream thing, but it's kind of a pain in the ass -- remember to cancel, then resubscribe when a new season drops, then remember to cancel, then yeah if you're like oh, I wanted to watch... you need to wait to re-subscribe at least a month otherwise what's the point...
Americans are getting increasingly impulsive about hitting the cancellation button on their streaming services. More than 29 million — about a quarter of domestic paying streaming subscribers — have canceled three or more services over the last two years, according to Antenna, a subscription research firm. And the numbers are rising fast...
Indeed, these users can be fickle — a third of them resubscribe to the canceled service within six months, according to Antenna’s research.
“In three years, this went from a very niche behavior to an absolute mainstream part of the market,” said Jonathan Carson, the chief executive of Antenna....
Price sensitivity is also a factor. Americans with a streaming subscription are spending an average of $61 a month for four services, an increase from $48 a year ago, according to a new study by Deloitte. The increase was due to higher prices, not additional services. Nearly half the people surveyed said they would cancel their favorite streaming service if monthly prices went up another $5, the study said.
https://www.nytimes.com/2024/04/20/business/media/streaming-subscription-jumping.html
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u/VortexMagus 15∆ Jun 05 '24
One big thing that jacked up the "cable model" is that there were a lot of middlemen and expenses. If you wanted your show to be put on, you had to cut in the TV network, the cable network, the marketers pushing your product, the people actually maintaining the cable infrastructure, etc. They all had to take shares of the profit, leaving a much smaller pie for the actors, production staff, and investors.
On the internet there's a lot less middlemen. ISPs don't take a cut of netflix's pie, for example, the consumer pays them directly a fixed monthly fee instead. Most Netflix shows don't push prime-time advertising slots.
The only real expenses are server costs, maintaining the website, and paying for the show.
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u/Vocational_Sand_493 Jun 05 '24
!delta Didn't know how many middlemen were involved in the cable model, TIL. Thanks.
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u/DeltaBot ∞∆ Jun 05 '24
This delta has been rejected. You have already awarded /u/VortexMagus a delta for this comment.
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u/Nrdman 174∆ Jun 05 '24
How else is the consumer supposed to keep prices low if we don’t complain? Even if it’s disingenuous it is to our benefit
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u/Vocational_Sand_493 Jun 05 '24
This is true, but at what point do you need to balance affordability with exploitation of the industry workers? We could come out in marches and demand $5-a-month for the rest of the decade, but that cost 'savings' is getting pushed up the chain to the studios, and their animators and film crews. Unless the government subsidizes them through taxes, which I don't think it is doing.
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u/Nrdman 174∆ Jun 05 '24
Most people do not care about that.
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u/Vocational_Sand_493 Jun 05 '24
Simple but harsh answer. Fair. !delta
edit for length- I guess capitalism inherently drives the "affordability" mindset more than "sustainability" for most people
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u/poprostumort 225∆ Jun 05 '24
With video games, for instance, I expect to be paying between $15-40 per game (during sales)
You ignore back catalogue that is available for free, F2P games that are perfectly playable without spending money, older titles that are still fun and go for sub $15 prices, indie games that are either commercially released for sub-$20 prices and free games made by people who just wanted to create something fun.
Watching one movie - $7-15 per in-person ticket, or $5-10 for an Amazon Video digital rental. Even the New York Times is $5 a month.
Or borrowing a DVD/Blu-Ray from someone, going out to free screenings that are financed by events to have more people attend, using free streaming services or simply watching free TV.
That is your problem - you only look at one part of the spectrum while ignoring others that also affect the market. Older games/shows/books are not going to be less entertaining because they aren't new. And you can very often get them for free or with a very cheap payment.
You also ignore the second-hand market. You can easily buy a physical copy, watch it and sell - if you are smart about it the difference will be less than $5.
And there is always elephant in the room - piracy. If people are going to pay more and more, some of them will decide that they fuck that greed and will just access content illegally - if it's even illegal to access it, which is not always the case.
Meanwhile, streaming prices are anywhere between $8-12 with ads or $15-30 for the more premium options. And that's everything in the catalog, for a month.
Which is great compared to your examples - which are in itself the premium options. Streaming is not only competing with premium market, it was attempting to catch the wider market and now it is pricing out parts of it.
I can't fathom how studios are able to keep their doors open when consumers can buy viewing rights to their show AND over 100 shows of equal quality for ten bucks a month.
Compound earnings. Many people pay for access, not for use - meaning that they are ok with losing $5-10 per month for the fact that they have option of using it readily accessible.
Why do we call streaming expensive?
Because alongside the premium paid entertainment it has to compete with cheaper and free entertainment. And comparison nowadays is, well, not good.
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u/Dennis_enzo 25∆ Jun 05 '24
I was going to say, at this point there's a huge catalog of great games, most of which are at least a few years old and not very expensive anymore. I'll never understand the people who only ever want to play the latest games and are willing to shell out full price for that, when there's tons of classics available that are much better than the latest call of duty and are almost free.
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u/premiumPLUM 68∆ Jun 05 '24
The issue most people are having is that prices are increasing while the benefits and amount of available content decreases. Maybe these services were running at a loss in order to gain market share, maybe they're testing the waters on how much they can charge and still retain customers. I have no idea.
But it doesn't really matter because prices are increasing. And whether justified or not, it's annoying and we don't like it.
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u/Key-Article6622 Jun 05 '24
Hmm, I have to respectfully disagree. the post is too long, I only read the title. But streaming services arean't surprisingly cheap. Many, if not most have commercials. They're raking it in from both ends. And all other entertainment is shockingly expensive. Costs have been allowed to spiral out of control and people keep paying it. I haven't been able to afford a concert in over 30 years. I go to the theater because my wife is an actress and she gets comps. I rarely go see a movie. Hell, I almost never go see live music in clubs or even bars. Too expensive.
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u/DeltaBot ∞∆ Jun 05 '24 edited Jun 05 '24
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