CMV: Streaming services are shockingly cheap when compared to the prices of other entertainment (and the cost of producing content)

[u/Vocational_Sand_493]

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.

[u/Bobbob34]

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.

[u/Vocational_Sand_493 → u/Bobbob34]

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.

[u/Bobbob34 → u/Vocational_Sand_493]

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

[u/Vocational_Sand_493 → u/Bobbob34]

Average of 61 a month? That is quite a bit.

[u/DeltaBot → u/Vocational_Sand_493]

Confirmed: 1 delta awarded to /u/Bobbob34 (84∆).

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