And there’s nothing you can do about it.
Hulu, Netflix and Youtube TV subscribers got some nasty news this year as their streaming services of choice all announced significant price increases.
Hulu announced yesterday that their Hulu TV service will increase from $54.99/mo to $64.99/mo on December 18. Last month, Netflix announced its “standard” and “premium” plans would increase by $1/mo and $2/mo respectively. Over the summer, Youtube TV announced a price increase up to $64.99/mo as well.
Netflix’s $1 price hikes are as reliable as the return of the McRib. The cost of its standard plan has crawled up from $8.99/mo on launch to $13.99/mo as of this year. Over the last several years, as multiple streaming services have hiked up prices repeatedly, the long-term business model for streaming has become clear: launch at a low cost to undercut cable and competitors, and ratchet up prices year after year by small enough increments that don’t upset customers, but eventually have them paying twice as much as when they first joined.
Whenever these price increases happen, customers like to raise a stink on social media. It’s not hard to find tweets and Facebook posts complaining about the ever-increasing cost of these services, which were supposed to be the cheaper alternative to cable. But I’m sorry to say that unless you’re unsubscribing, your stink just isn’t strong enough.
Price hikes upset customers, but they upset them just enough to keep them from unsubscribing — even if the price increase isn’t justified by new features or content. Our Facebook “Talking About” data shows that the regularity of Netflix’s incremental price hikes have had a dampening effect on customer outrage, as the number of posts about Netflix in the immediate aftermath of a price increase announcement have decreased steadily over time.
Hulu’s recent price increase is anything but incremental, and is likely a byproduct of majority owner Disney’s no good, very bad year which has led them to reorganize the company and focus on its few growing services like Disney+ and Hulu.
Since the beginning of the year, Disney+ and Hulu have seen their Apple App Store ratings increase by 195% and 6.8% respectively thanks to the pandemic, and Disney is looking to boost its numbers after a disappointing quarterly report. But the blow is softened by both Hulu’s comfortable position under the Disney umbrella, which allows it to sell streaming bundles with access to sister services Disney+ and ESPN, and the ongoing pandemic, which is worsening and makes streaming an appealing option with endless hours stuck at home with nothing to do.
But Hulu may have pushed their luck a little too hard with this increase, which comes less than a year after the cost of Hulu TV increased from its original $45 to $55 last December. “Talking About” data shows that the first price increase had little-to-no-effect on customer outrage, as counts went down after the announcement. Yesterday’s announcement, on the other hand, increased “Talking About” counts by 18% and counting.
Disney’s next few quarterly reports will show the real impact of this price hike, but unless users unsubscribe, streaming services will keep slowly turning up the dollar dial and looking back at the crowd to see how far they can crank it before reaching critical mass. Still, Hulu TV and Youtube TV’s prices are now reaching cable levels, and may even continue increasing year-over-year. If that keeps happening, customers are left between a rock and a hard place.
What are your options if Hulu TV becomes more expensive than the cable package it convinced you to leave behind? Unsubscribing in protest leaves you with either more limited streaming options or will have you making the walk of shame back to your old cable provider, cutting off your access to original shows on Netflix and Hulu which have increasingly defined pop culture. Unless a huge number of subscribers choose to cut the stream despite all these obstacles, be prepared to dish out more year-over-year for the content you’re currently consuming.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
Originally Posted on November 17, 2020 – Hulu and Netflix Are Only Getting More Expensive
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