Streaming companies have raised prices during 2023, but despite shelling out more, close to half of consumers don’t feel their experience has improved, according to new survey data from Amdocs.
Amdocs' New Streamer 2024 research, conducted by Dynata, surveyed 1,000 U.S.-based consumers and found 45% of respondents agreed rising costs for subscriptions haven’t provided them with a better streaming experience. Additionally, 40% said higher prices haven’t delivered more access to quality content.
Here are some examples of price bumps in 2023:
- Apple TV+ increased from $6.99 to $9.99 per month in the U.S. in October. The same month Disney bumped its ad-free plans on Disney+ and Hulu to $13.99 and $17.99, respectively (following an earlier increase in December 2022).
- NBCUniversal’s Peacock marked it’s first-ever price hike in July, with $1 and $2 increases to its Premium tier (now $5.99 per month) and Premium Plus (now $11.99) – after previously doing away with a completely free ad-supported option.
- Paramount+ also implemented $1 and $2 dollar increases for its Essentials and Paramount+ with Showtime offerings, now $5.99 and $11.99 per month, respectively. The company has also indicated further price increases are coming.
- Netflix this fall increased the cost of its Basic plan (which is already phased out as an option for new and returning customers) to $11.99 per month and the premium ad-free tier increased by $3 to $22.99 per month (the standard ad-free plan remained the same at $15.49).
- Warner Bros. Discovery didn’t raise the price of Max when it relaunched the service in May but introduced a new pricier $19.99 per month premium tier. Before the launch, HBO Max in January saw a $1 increase to $15.99 per month, and more recently WBD upped ad-free Discovery+ by $2 to now $8.99 per month.
Virtual MVPDs, which offer cable-like channel lineups, such as Hulu Live TV, YouTube TV and Fubo TV have all also raised prices this year.
Some streamers have cited increasing ad-free plan prices to drive more uptake of tiers with ads, as those subscribers drive advertising revenue and some nascent ad plans still need to grow viewer bases to help attract marketers and deliver eyeballs. Around a quarter of respondents in the Amdocs survey expressed openness to seeing more ads, with significantly more willingness among younger generations.
Content quality beats price for loyalty
Even though streaming prices are increasing (a trend that at least one analyst expects to continue), cost is no longer the main concern for consumers in terms of deciding to stay with a service, according to the survey.
Quality of content was the top factor (48%) respondents picked as most important for sticking to a service, while less than a quarter (21%) cited price. And the percentage citing cost as the primary reason to stay with a service decreased since 2020 when 38% pegged it as most important. Quality of content also far outpaced importance of quantity, the latter which 23% claimed was the top reason to stay with a service, compared to the 49% that said the same in 2020.
What do consumers want in order to feel they’re getting bang for the buck?
According to the survey, 46% of consumers spend more than $50 per month on digital subscriptions, with more than a quarter spending above $75 per month.
So what are the top features or considerations consumers need in order to feel a subscription is worth their investment? Original content landed atop at 66%, followed by a continual flow of fresh content every few weeks (56%). But it’s not just new content consumers are seeking as 52% cited access to older movies and TV shows as making a service worth the price.
Those considerations were followed by these other top responses for feeling a subscription price is worthwhile:
- Ability to stream on a variety of devices (50%)
- Ad-free streaming (48%)
- New content every few months (30%)
- Personalized content suggestions (27%)
- Option to add other streaming network into one subscription (26%)
Just under 70% of respondents shared they watch an equal mix of old and new content – speaking to interest in not just newly released content and a “new to me” TV viewing trend separately highlighted by recent Hub Research data.
Amdocs’ survey revealed additional insights about what consumers are looking for to enhance their streaming experience, including a more streamlined experience. When asked if consumers wished there was a single portal or app where they could access all of their streaming subscriptions and related content, 42% said it would be a “nice to have” and an additional 40% said “this is very desirable.”
Additionally, games may have a place. Around 34% said they’d be likely to try a new gaming service that’s expected to be introduce by Netflix, with another 18% saying the same as long as there was no additional cost.
Streaming still underpriced?
Streaming price hikes haven’t been a complete surprise. Earlier analysis from TVREV’s Alan Wolk predicted that consumers should prepare for a wave of price increases.
In an October column on StreamTV Insider, the analyst made the case that higher prices are warranted, contending that services had already been significantly underpriced – stemming from the early days of media companies focusing primarily on growing subscribers instead of the more recent attention on profitability – where at the start they offered very low prices to get people in the door, and once in, gradually climb.
And Wolk argued that services are still underpriced.
“For what they have on offer, and, especially, for what they are soon planning to offer, the bigger SVOD services are still way underpriced and will need to start charging a lot more each month to keep their accountants happy,” he wrote in an October column, pointing to Max as an example where subscribers get HBO/Discovery/HGTV, as well as the newly added 24-7 CNN Max product, and live sports through the Bleacher Report add-on.
Taken together, Wolk sees it as fairly close to a full pay TV bundle, including premium channels.
“Which means it’s pretty delusional to think that you’re going to continue to be getting all that—without ads—for just $26/month (the price of ad-free Max + the $10 sports add-on),” the analyst wrote. “A good chunk of the pricing decision, or at least the speed at which it increases, will be tied to how well each service’s ad-supported tier is doing."