Netflix and Discovery+ ad-free subscriptions are a great deal when you consider the demand for their content, while some SVODs are charging their users more.
In an inflationary environment, it is important to understand which streaming services will have the leeway to charge consumers more. The central value proposition streaming video on demand services (SVODs) provide to their customers is a list of content they want to watch for a recurring subscription price. The key point is that it is not just the size of the catalog that a platform values to customers but how desirable that content is. Demand is therefore key to understanding what price point a platform should set in order to be an attractive deal to customers and remain competitive with other platforms. We see a clear correlation between the total demand for content on each platform (movies and TV series) and the price each platform charges consumers.
As streamers continue to raise prices but consumer budgets are squeezed, striking a balance between keeping up with rising costs while not triggering subscriber churn will be critical. As Wall Street’s focus on these platforms shifts from just looking at net subscribers to examining streaming revenue, the ability to charge consumers more will help steer these streamers toward becoming profitable.
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As far as stand-alone platforms go, Netflix’s Standard tier looks like a great value for subscribers and offers more in-demand catalog access than its $15.99 price, according to data from Parrot Analytics. Offers that take consumer research into account. , streaming, downloads and social media, among other interactions.
At the other end of the price spectrum is Discovery+, which at $6.99/month is one of the cheapest ad-free tiers, but still manages to punch above its weight with its catalog in high demand at this price.
On the flip side, the $10.99 price tag for Showtime looks like a lot for the amount of on-demand content it offers to subscribers. Comparing Starz and Showtime, Starz appears to offer the most value between these two streaming platforms made up of premium cable channels. Compared to Showtime, Starz offers its customers a platform for shows and movies that are 27% more on-demand and cost 18% less than Showtime.
Platform Catalog Demand vs Monthly Subscription Price
Disney+ has just launched its new ad-supported tier and the Disney+ Premium tier that costs $10.99/month. This seems right in line with expectations given the amount of demand for content on its platform.
Apple TV+ raised its price in October (from $4.99 to $6.99) for the first time since the platform launched. The chart shows how the price increase has moved the Apple TV+ to the wrong side of the “price right” line. While the price hike now makes its catalog a bit more expensive than expected given the demand, it’s important to remember that the Apple TV+ catalog is built from scratch as a more powerful incentive for customers to sign up. Works. This focus on exclusivity allows Apple to charge more than a platform with the same level of demand that comes from non-exclusive content.
Things get interesting when we consider how much the bundled options cost. While the Disney+/Hulu/ESPN+ bundle is one of the more expensive options, it makes good on its commitment to subscribers and offers a highly sought-after catalog of shows and movies. When we consider Hulu or Disney+, their catalogs are priced in line with what we would expect given the demand for their libraries. The bundled option delivers more than we expected at its price point. This is an example of an effectively priced bundle that will entice customers to automatically upgrade from any platform.
Compare Disney+/Hulu/ESPN+ with the Paramount+/Showtime bundle. While Paramount+ looks attractively priced on its own, the additional cost when Showtime is added to the bundle makes the bundled option more expensive.
Christopher Hamilton is a Senior Insights Analyst at Parrot Analytics, a partner with WrapPRO. For more from Parrot Analytics, visit the Data & Analytics Hub.
