Many people remember how Netflix jumped the gun on the consumer’s shift to streaming in 2011. Netflix separated its DVD and streaming services — hoping to nudge users to stream more content. While Netflix had hoped for consumers to have a quick and smooth transition to streaming, it instead created a debacle that outraged loyal users and investors.
This is old news, but what is relevant is that the world is still shifting its viewing habits to include streaming. Whether it is in addition to cable subscriptions, or in absence of cable, consumers are streaming more and more home-viewing content.
Consumers Are Doing the Math
Whether it’s $40, $50 or $60 a month, and those are the cheap options, cable and satellite subscriptions are more expensive than streaming TV and movies. As more consumers realize they can reduce a $500 per year cable bill to less than $200 a year, streaming services will see the upside in this budget-conscious society. Here is a look at the top three streaming service providers’ pricing.
- Netflix’s full package includes streaming and one-at-a-time DVD rental for $15.98 per month or $191.76 a year. However, if consumers only want one of the two options, the price is reduced to $7.99 per month or $95.88 a year.
- Hulu Plus also allows consumers to stream TV and movies (albeit with a much thinner library) at $7.99 per month and no rentals, which amounts to $95.88 a year.
- Amazon has a different price structure. They sell TV shows streaming for $1.99 an episode, but the best deal is for members who already subscribe to Amazon Prime for $79 a year or a mere $6.58 a month. Amazon allows all Amazon Prime subscribers to view Amazon streaming content for no additional cost.
Do Consumers Want More Media, or Will They Go Off the Grid?
As the market shrinks, and new players enter the streaming business each year, most everyone agrees that streaming TV and movie content will increase in 2013. An interesting question is, will we see more consumers purchase a streaming service to augment a cable subscription, or will streaming drive cable service cancellations as consumers flock off the grid?
Be sure to read the next story in my series on the continued growth of streaming content: Streaming Media Part Two – Consumers Want Content Everywhere and on Their Time.