Streaming services that are priced right — and ones that just miss the mark

When you consider the demand for their content, the ad-free subscriptions to Netflix and Discovery + are great, while quite a few SVODs overcharge their users.

In an inflationary environment, it’s important to understand which streaming services will have scope to charge consumers more. The central value proposition SVODs offer their subscribers is a catalog of content they want to watch for a recurring subscription price. The main point is that it is not just the size of the catalog that makes subscribers appreciate the platform but how attractive that content is. This is why demand is important to understand the price point a platform must set in order to be a compelling deal for subscribers and remain competitive with other platforms. We see a clear relationship between the total demand for content on each platform (movies and TV series) and the price point each platform charges consumers.

As broadcast companies continue to raise prices but consumer budgets are squeezed, it will be important to strike a balance between keeping up with rising costs while not sparking subscriber inflation. As Wall Street’s focus on these platforms shifts from simply looking at net subscribers to scrutinizing streaming revenue, the ability to charge consumers more will help these platforms become profitable.

Become a member to read more.

Leave a Comment