I hate to be the bearer of bad news, especially on the tailend of what has likely been an ever-expensive festive period for all of us. But for those wondering if the likes of Disney Plus, Peacock, and Paramount Plus are going to give us a break from price increases in 2024, the answer from experts seems to be a resounding no.
Don’t stress just yet, though – no future plans have actually been revealed. But as one year closes and another begins with plenty of exciting 2024 releases like House of the Dragon Season 2 on the way, I’ve been wondering what changes and evolutions we’re likely to see this year, particularly around streaming services. And pricing – alongside the general future of streaming services – is inevitably something we at CinemaBlend, the movie buffs and TV binge watchers alike, care about most.
What Is The Forecast For Price Increases In 2024?
According to Dan Goman, the CEO of Ateliere Creative Technologies, a company which provides software to assist in distributing creative content to media companies, price increases won’t be slowing down anytime soon.
The entire industry is in a state of turmoil and transition, and until things settle into a new, reliable monetization model, I don’t believe there is a ceiling. The industry is intentionally driving higher costs to force consumers into models that are more sustainable, profitable and predictable for them.
This much seems true and is evident in the introduction of ad-supported plans. Hulu subscriptions, as well as Max have had the cheaper commercial riddled plans for some time, but Disney Plus has only just gone international with its selection of price points, with Netflix joining the ranks, too. Amazon Prime Video is also introducing ads on January 29 in the US and UK, with other countries expected to see the changes later in the year.
My initial reaction to these changes to the Disney Plus price and beyond is it’s a money grab, but these services actually want us to go for the cheaper, ad-supported plans over the far more expensive ad-free equivalents. After all, the more eyes on the ads, the more lucrative the spots are to sell, the more money Disney Plus gets from advertisers, and therefore the more sustainable the platforms are financially.
So expect more price hikes – though hopefully the ad-free plans will remain steadily at their current rate. As for the highs of the premium packages? Well, Philo’s Chief Operating Officer, Mike Keyserling, told CinemaBlend streaming services know exactly how high they want to go.
Many streamers launched with negative net margin intro pricing to capture market share. Over time, and especially as growth slows, there has been significant pressure to make the businesses profitable. The companies know where the sweet spot is, but don't want to scare off customers and so approach the slow march.
Asked whether there was an endpoint for yearly growth for such services with the ever increasing prices, Keyserling added they were “getting close”, but that the rise of bundle packages could improve both pricing in terms of value for money, and therefore subscriber retention.
The Buzzword For 2024 In The World Of Streaming Is “Bundling”
Last year did see a whole lot of changes and alliances going on. The most exciting, I think, was Paramount Plus and Showtime uniting as one. You now can’t subscribe to Showtime on its own, but if you want its library of great, gritty shows like Yellowjackets (a personal favorite) or The Curse, starring recent Golden Globe winner Emma Stone, you’ll need to stretch for the more expensive Paramount Plus subscription that bundles together the two.
In my eyes, perhaps less thrilling, was the final product of the Warner Bros. and Discovery merger, in which HBO Max rebranded to Max and took on a bunch of non-scripted, reality TV titles – mostly of the home improvement variety. My own personal feelings aside, though, according to experts this could be just the beginning.
When we asked Keyserling about what strategies he foresees streaming services putting into action to increase subscriber retention, he said:
Bundling (or re-bundling), the big 2024 buzzword, will help...We think bundling the SVODs (Subscription Video On-Demand) with other types of services will have a big push in 2024.
Not just about throwing together two already established streaming libraries together, then. In fact, what we could be seeing is more models like Amazon Prime, or more realistically like Walmart Plus', where you can get Paramount Plus free alongside. Alternatively, it could be even more phone contracts where you get six months or more of Max, Apple TV Plus, Disney Plus, etc.
Introducing another buzzword, Ateliere's Dan Goman thinks it's all about "Cable 2.0".
If you really think about it, a no-commitment, high churn subscription model is not a comfortable model for the industry. We are rapidly heading towards “Cable 2.0” - large cable bundles, packed with tons of content and various forms of commitment from subscribers.
Asked whether he thought the future was therefore in current popular cable cutter solutions like Sling TV, Fubo, and YouTube TV, he was less optimistic.
I think some of these services will go away in the not-too-distant future, as they may not be relevant in this new Cable 2.0 world. While there may always be a small audience for linear programming, most viewers prefer content on demand (aside from news or sports type of content). This is especially true for GenZ and younger audiences. While this may be controversial, except for very large brands and specialty content, I believe linear models will be irrelevant going forward.
The providers paving the way for Goman's vision? Apple TV, Roku, and YouTube TV could be the ones to shift the whole streaming service structure, predicting a push for higher value bundles that restrict the ability to subscribe to one service and its catalog without also purchasing the rest.
One way to push subscribers into parting with more money, I also can't help but think there could be uproar if we see these strategies used. The rise of streaming services and their popularity always hinged on flexibility and not being locked into a contract. While not a sustainable business model clearly, for the consumer the ability to subscribe, rinse a library, cancel, and repeat has been the biggest appeal across the top streaming platforms since their rise to prominence.
What Else Is In Store In 2024 For Streaming Services?
Keeping us subscribers happy isn’t all about price and content (although according to Goman they are the most defining factors, which I’d have to agree with). When I asked Keyserling what Philo would be focusing on, he said:
As the industry evolves, there's an opportunity for the cord cutting platforms to have more attractive entry packages that customers can build on. [There’s] also an opportunity to superserve audiences with particular interests/characteristics vs. trying to be all things to all people.
Already offering over 70 live channels alongside its attractive 7-day Philo free trial, 2024 could bring more customization to Philo. Also expect more upgrades to its interface, with Keyserling pointing out the importance of "product experience, including personalizxation, improved search and discovery" amongst the aspects services would need to focus on in 2024 to retain their subscribers.
The long and short of it, then, is price hikes are likely to continue. I expect to see Disney Plus, Hulu, ESPN Plus, and Peacock hit us with inflated prices this year, having followed a pattern of annual increases since launch. The good news is I also expect to see deals from these providers, too. And hopefully there will be a few before we hit the end of the year and the Black Friday streaming deals inevitably arrive.