Why Consumers Will Adjust to The Ever-Increasing Cost of Streaming

The promise of streaming from the get-go was a no-brainer: streaming TV would free us from expensive, outdated cable subscriptions. But with the television streaming war getting hotter than ever, consumers are expected to make some tough choices.

With a bunch of new services that’ll join Netflix, Hulu and Amazon Prime Video on the scene, it looks like the price of keeping up with TV could soon be comparable to—or maybe even more expensive than—a cable-TV subscription.

These new platforms include WarnerMedia, Disney +, NBCUniversal and Apple, which are all hoping to grab a slice out of the lucrative streaming pie via their exclusive content.

But how much are customers willing to pay for all of their favorite services?

Unlikely Consumers Will Get Their Wishful Monthly Rate

So, how much are you willing to pay to watch your favorite shows? If you subscribe to more than one streaming service, you’ve probably picked them up gradually, which might make you less aware of how they all add up. And it’s not an incidental amount.

According to a new Hollywood Reporter/Morning Consult poll, about $21, or somewhere between $17 and $27 is the amount most people are comfortable with. Given that even a modest bundle would exceed that ceiling—it’s unlikely consumers will get their wishful monthly rate. Also: I’m not going to get into the pricing specifics, as this changes all the time and would also put a timestamp on this video. 

But in the face of this ever-escalating viewing budget, some TV fans are going back to basics. According to the Los Angeles Times, an increasing number of Americans are seeking out that old-school staple: the TV cable subscription.

But if most Americans pay $80 to $100 per month today for low quality, ad-supported, linear cable programming, it’s not a stretch to ask them to move to bundled streaming for about the same rate.

The Rise To The Top

But while convincing non-wire cutters to pay more than $21 isn’t the issue, it’s up to the streaming services to appeal to specific audiences to get them to open their wallets.

It’s clear that players with the best new “must-see content” will rise to the top and attract the most customers. Their services won’t cost $21, though - it’ll likely be less than $80 per month, but more than $30.

The reason for that is that everyone is underpricing their services right now, thanks to investor-backed roll-outs, in order to scale globally in the winner-take-all markets.

When everyone has moved over and the streaming services need to pay off their debt, prices will start to go up. This is when we can expect to see different premium subscriber tiers emerging, in which some customers will choose to pay for better content and better service.

For TV addicts like myself, the future offers an avalanche of choices, both in terms of what to watch and where to put your money. And for the media companies, it will be an all-bets-are-off struggle to guarantee its streamer is indispensable to viewers.

One way or another consumers will end up spending more on entertainment than they ever used to, and they’ll be OK with that, just like people have gradually accepted paying over a 1,000 bucks for an iPhone.