ANALYSIS | The era of cheap streaming platforms is officially over

The disruptive streaming model created by Netflix, which offered “all you can eat” menus of movies, series and endless entertainment without annoying ads at extraordinarily low prices, officially came to an end this Wednesday.

Disney chief Bob Iger announced during the company’s quarterly earnings report that the Magic Kingdom will raise prices for Disney+ again for the second time in less than a year, raising the monthly cost of its ad-free plan by $3 to $13.99 in October. Hulu, in which Disney owns a majority stake, will also increase the price of its $3 ad-free monthly subscription to $17.99.

The more than 20% increase in prices means Disney+ will now cost double the original price when the service debuted four years ago, and Hulu’s ad-free tier is now more expensive than Netflix’s most popular plan.

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When Iger launched Disney+ in 2019, he said he deliberately priced the service well below competitors “to reach as many people as possible.”

But Wednesday’s move to significantly increase prices marked an acknowledgment by Iger of the media giant’s intent to squeeze more revenue from streaming by pushing consumers toward ad-supported plans, which have proven more costly. profitable.

“The streaming ad market is picking up,” Iger told investors at a quarterly earnings conference call. “It’s healthier than the linear TV ad market. We believe in the future of advertising on our streaming platforms, both Disney+ and Disney+. like Hulu.”

Disney’s moves are part of a larger trend that is playing out across the industry landscape. Media companies, seeking to maximize their profits as Wall Street grows impatient with them swimming in seas of endless red numbers, are quickly abandoning pricing structures that offered consumers bottomless libraries of content at far too good prices. to be true and for everyone.

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Paramount, Warner Bros. Discovery, NBCU, and even Netflix have raised prices this year in an effort to stay profitable. And as Iger announced Wednesday for Disney, restrictions on password sharing are also on the way.

The announcement ends much of the initial appeal that led to the popularity of streaming. When Netflix first offered its pioneering service for just $8 a month, millions of people signed up, eager to access the company’s extensive catalog for just a fraction of the cost of a traditional cable TV package. That served as the genesis of the streaming era, in which traditional entertainment companies like Disney rushed to launch their own direct-to-consumer products at unsustainably low prices.

Now all that is over.

Those huge content libraries are getting more expensive (not to say shrinking) every year. In fact, by 2023, consumers who bundle a few streaming services will find that the final cost is the same as basic cable. Add to this the introduction of streaming advertising, and the end product eerily resembles cable on demand.

It’s an ironic end to the streaming wars. After pouring billions and billions of dollars into building supposedly revolutionary streaming platforms, and decimating the business models that for decades provided stability to the industry, the end product looks terrifyingly like what companies and consumers were trying to break free at first.


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