When Netflix first unveiled its streaming video service in 2007, it felt like a miracle. Netflix’s DVD customers in the US, who were paying between $5.99 to $17.99 a month, instantly had access to 1,000 movies over a web browser. No more waiting for DVDs in the mail, no ads like TV – just hit a button and watch. Instantly! Now that seems like ages ago. Netflix’s most premium 4K streaming plan now costs $23 a month, while its standard subscription without ads costs $15.49 a month. (There is a standard plan with ads for $6.99 a month, but that doesn’t support offline downloads and also doesn’t include some content.)
Netflix has also been cracking down on account sharing recently, which is great for its overall earnings and subscriber count, but bad for anyone trying to save a buck. You’ll have to pay an extra $7.99 a month to add more member slots to the standard and premium plans.
And it’s not just Netflix. Over the past year, just about every major streaming service has raised its prices considerably. Apple TV+ is doubling its original price to $10 a month ($99 annually). Disney+ saw a hefty increase as well to $14 a month for its ad-free premium tier. For those who subscribe to multiple services, it’s easy to think we’re back in the bad old days of cable TV, where we ended up spending gobs of money for hundreds of channels.
But let’s not get dramatic. Subscribing to the streaming services you use the most is still far cheaper than going for a typical cable plan. In my area, Comcast’s most popular plan with over 125 channels is listed at $60 a month, but the company hides the additional $27.80 broadcast network fee and $13.40 regional sport licensing fee. My actual monthly cost starts at $101.20, and that doesn’t include taxes, equipment rental fees (at least $10 a month) and other additions Comcast may coax you into. (Want 300 hours of Cloud DVR? That’s another $20 monthly!)
According to the Bureau of Labor Statistics, the average urban consumer spends an eye-watering $575 a month on cable, satellite or live streaming TV service. To be clear, those numbers reflect some customers spending a ton more on sports and other packages compared to others. But still, even the prospect of spending $370 a month on cable (the BLS’s consumer average from 2010) feels unfathomable. All of a sudden, Netflix creeping toward $25 doesn’t seem so bad — especially since cable customers also have to subscribe to streaming services to see their original shows.
While some have argued that streaming price hikes signal the end of the cord-cutting dream, that’s far from true. Cable prices were already high a decade ago, and they’ve risen considerably since then. (Broadcast fees alone were estimated to jump between 8 to 10 percent between 2016 and 2019.) If anything, the case for cord-cutting is even stronger now. With the wealth of content available on streaming services, do you really need to pay hundreds to sit through another HGTV marathon? Especially when you can find some HGTV content on Max, and similar shows on other streamers?
Nobody likes to see their favorite services getting more expensive. You could easily argue that streaming prices hikes fall firmly within Corey Doctorow’s concept of internet enshittification, wherein companies provide cheap and useful services to grow their userbase, but inevitably make the experience worse to squeeze out more money and appease their investors. Unless an online service is being run as a non-profit or completely free side project, enshittification seems inevitable.
But it’s worth acknowledging why streaming services were so cheap to begin with. Netflix’s streaming service was practically an experiment early on — it was rolled into existing subscription plans, and you could only watch up to 18 hours a month. When Netflix launched its standalone streaming subscription in 2010, it was only $7.99 a month — a price that held true until its basic plan jumped a whole dollar in 2019. While the company introduced more expensive standard and premium plans along the way, the entry plan always seemed like a tremendous deal. Who wouldn’t want instant access to thousands of movies and TV shows for the price of two coffees?
Like many startups during the 2010s, Netflix continually raised tons of money (around $5 billion) without making enormous profit — or at least, not profit in line with the tens of billions the company has spent on original content over the last decade. Enticing new subscribers and keeping them was far more important to Netflix than actually being a sustainable business. So it wasn’t too surprising when other services like HBO Max, Disney+ and Apple TV+ launched with low prices competitive with Netflix.
According to Janko Roettgers, author of the newsletter Lowpass, and a former media and technology reporter at Variety, Netflix had an advantage over the competition because its legacy DVD business could fund its streaming ambitions. Other companies like Disney and Warner Bros. had to decide how streaming fit within their existing TV channels and movie studios.
“Now [Netflix is] making money with streaming across the world, and they’re starting to get into gaming,” Roettgers noted on the Engadget Podcast this week. “So they’re pretty quick at following up. And if you look at some of these legacy media companies, well, they still have linear networks. And those are declining slowly and slowly, and it’s taking them a long time to figure out […] Should we get out of this? How many can we keep running? How many of those do we need to shut down?”
When Netflix announced that it was actually losing subscribers in 2022 — 200,000 in the first quarter, followed by a whopping one million users in the second quarter — it was like a nuclear bomb exploded in the streaming industry. It immediately led to belt tightening across every service: Widespread Layoffs, canceled shows, and more strategies to make money. Netflix’s ad-supported tier launched later that year, while its account sharing lockdown began in earnest this May.
With interest rates on the rise and investors worried about the economy, raising prices was the inevitable next step for every streaming provider. And unfortunately, that trend won’t be reversed anytime soon. At best, we can only hope that the threat of losing users and pressure from competition will keep Netflix and others from reaching the dreaded highs of cable.
But don’t forget, there’s one thing you can do with streaming services that’s far more difficult with cable companies: You can cancel and subscribe easily online. You don’t need to set aside time and emotional energy to deal with a customer service rep on the phone, or block out a morning for a technician to visit. That potential for churn hangs over every streaming provider. So if their prices get too high, or they’re not actually providing enough valuable content to watch, just leave.
Still, it’s worth remembering that access to media is cheaper than ever. You don’t have to worry about spending a ton to rent movies from Blockbuster or your local video store. There aren’t any late fees to worry about. And while I miss the heyday of DVDs, buying just one of those discs could cover a month of service across two streaming services today (sometimes three!).
So sure, it stinks that Netflix is getting more expensive. But, personally, I’d easily take these higher prices over life before the streaming era.
