OPINION: It felt rare to hear about a price hike for any video streaming service a few years ago but now they’re happening so regularly that it’s hard to catch up. The chief instigators of the price rise movement? Netflix.
Netflix’s top tier (its Premium 4K HDR option) is the most expensive of any streaming service, and its move to raise the ceiling with subscription fee increases hasn’t, at least in the long-term, put a dent into it. In fact, the trouble it faced a few years ago can be seen as a blip considering it’s now reached 300 million subscribers worldwide.
That jump in subscribers is likely a case of its Basic tier with Ads that offered customers a cheaper path during the cost-of-living crisis (it’s a surprise Netflix didn’t offer an ad-supported tier earlier). Most of its revenue is likely coming from that tier, as I’m not convinced there are as many watching in 4K HDR, especially with people watching on their phones and tablets.
And as Netflix continues to needle at that threshold, I think it confirms something that I’ve been pondering for a few years now. We can pretty much confirm now that the low prices for streaming services when they launched was a loss-leader position to initially attract customers, all before reaping back those costs by gradually upping the price over the years. The problem is, this latest rise in price from Netflix is not the last one – it’s going to keep on going.
I think that at some point we’ll be seeing a number of video streaming services reaching the $30 / £30 a month, and maybe more. The slow demise of traditional, linear broadcasts over an aerial, as well as streaming eating into cable services has meant that watching programming over the Internet has become the de facto way of consuming content in the home. Every service provider has seen the shift or known that it was the future, whether it was BBC iPlayer (which is one of the true pioneers in the streaming market), to Freely and even TV brands that are getting in on the action with Samsung TV Plus and LG Channels.
Internet streaming is no longer the future. It’s right here and it is the way we’ll watch films, TV series and other programming going forward.
The future we’re faced with
In making the Internet the future, that’s had repercussions for traditional modes of broadcasting – namely in generating revenue. If viewers are watching less terrestrial television, advertising becomes less effective and broadcasters make less money. This shortfall has to be made up somehow.
So we were wrong in thinking that the switch from cable or aerial was going to save people money. That was never going to happen, at least not in the long-term. All chips are in Internet basket now, and £8.99 / $8.99 to subscribe to a streaming service that offers thousands of hours of content is great value for you, but a poor return for the content provider.
What streaming services have to make up is the deficit or loss from not having the option to make as much money from selling to cable or linear broadcasts. It used to be that a film studio could sell a movie multiple times: cinema, home video, other streaming services, cable services, linear broadcasts, etc. Those options are no longer as lucrative, ironically because of streaming’s convenience.
With streaming services almost operating as their own mini-studios (like the independent studios of a decade ago) £8.99/$8.99 is not going to make that money back, but £39.99/$39.99 a month might just do it, and that, really, is the goal. You only have to look what hybrid providers with their various bundles in the US such as Sling TV and fuboTV charge ($40/month and $79.99/month respectively), to see how much TV providers are willing to charge.
Right now there remains an equilibrium. There are more expensive streaming services and less expensive ones, and you can mix and match. When Max (not Trusted Reviews’ Editor) potentially arrives in the UK in 2026, it’ll likely try to be a premium one, though I think it’s entered the game too late to succeed at that.
For right now it’s usually Netflix and/or another smaller one (Paramount+, Discovery+, Peacock, Apple TV+) along with a UK catch-up service that’ll keep most folks ticking along.
Netflix is playing a smart game at the moment in becoming a service that offers everything. It seems to have stumbled accidentally onto it, but look at it now and there’s film, TV series, mobile games, sports is having a bigger influence (the WWE deal might be the best thing it’s done), and there’s reality TV too. Everything that we might have to find at two or three other services, it’s looking to jam into one big one.
At some point, streaming services will force the issue in terms of pricing and you’ll have to choose. We’re in the endgame for video streaming services, and with a snap of its fingers, Netflix is in pole position to win the streaming wars.
