NEW YORK: American TV viewers who have abandoned traditional, bulky cable TV packages in favour of cheaper, “skinny” digital content bundles are finding that prices are creeping up and they could end up spending more than before.
Axios Media Trends observed how both digital multichannel video programming distributors (dMVPDs), like DirectTV NOW and YouTube TV, and video on-demand companies, like Netflix and Amazon, have hiked subscription rates over recent months.
An extra $5 a month in the case of dMVPDs already costing around $35 may not seem too steep initially, but, as Axios observed, many consumers subscribe to more than one such bundle in order to access both live and on-demand programming.
“Eventually, consumers could expect to pay more for digital programming in total than they do now for their traditional cable or satellite package,” it said.
Amazon and Netflix, meanwhile, have increased prices by between 16% and 20% during the past nine months, and the latter is reported to be testing a new plan that would be priced at 20% higher again.
Currently, there is little or no regulation around pricing in these markets, Axios noted, with opportunities to tackle it only cropping up when addressing competition issues during regulatory reviews of mergers and acquisitions.
One such opportunity was passed up last month when the AT&T merger with Time Warner went through without any sell-offs being required.
Previously, in fact, AT&T CFO John Stephens had indicated an intention to add more video streaming services that would cover more audience segments, including a skinny bundle priced at $15 per month.
WatchTV, offering channels from both AT&T and Time Warner, was indeed launched a week after the acquisition was completed, initially only available to AT&T wireless subscribers but it is due to be offered as a standalone service as well.
Axios expected that the trend towards increasing the price of video streaming content will extend to other media, noting that Spotify is testing a 10% subscription fee increase in Norway.
Sourced from Axios Media Trends, The Hollywood Reporter, Adweek; additional content by WARC staff