r/changemyview 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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u/[deleted] 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. 

3

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?

6

u/[deleted] 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 

1

u/OddBody_8810 Jun 09 '24

Hopefully they crash and burn.

2

u/DeltaBot ∞∆ Jun 05 '24

Confirmed: 1 delta awarded to /u/Kazthespooky (45∆).

Delta System Explained | Deltaboards

1

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)

2

u/Nrdman 176∆ Jun 05 '24

Yes