The $90 Streaming Package
Disney just raised the price of its Disney+ streaming service. It is the fourth increase since the service was founded in November 2019. CEO Bob Iger, who retired and then returned, hoped the low price would bring in subscribers. It worked. The subscriber count raced to 150 million. Along the way, however, Disney lost $10 billion, as it likely lost money on virtually every subscriber. Disney now faces a major hurdle. The monthly price of the seven major streaming services is about $90 a month, taken together. And many households simply cannot pay that much. There will be some losers. Disney could be among them. (Customers are abandoning these 25 brands.)
The Wall Street Journal looked at the seven services and their monthly pricing. This included Disney+, Apple TV+, Hulu, Netflix, Peacock, Paramount+ and Max. Amazon was omitted because its streaming service is part of the Amazon Prime membership program. However, it is worth noting that it is the second largest service in America, with over 200 million members.
The analysis also pointed out that for the five services for which financial figures were available, four (Disney+, Peacock, Paramount and Max) lost money. Only the largest service, Netflix, was profitable. It has approximately 230 million subscribers worldwide.
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Streaming was supposed to be the Holy Grail of media and entertainment company profits. Fewer people went to theaters, mostly because of the COVID-19 pandemic. It was more convenient to watch from home and, based on movie theater ticket prices, less expensive. People turned away from cable as a means to watch movies. Entertainment companies already had large libraries of movies and TV shows that they had paid for in the past. What was not to like?
What was not to like is fickle consumers who jumped from service to service, which helped cause what is known as “churn,” the great enemy of streaming. People shared passwords, which cut into the chance to get new customers. Most services have cracked down on that. However, subscribers unhappy with the decision have canceled subscriptions in some cases.
Streaming competition has become a battle and a bloody one. People will not pay $90 a month to get every package in the market.
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