Are Entertainment Prices Peaking -- Or Consumers Overspending?

Consumer entertainment pricing continues to be in flux, much to the chagrin of content providers.

Two news stories point to more changes, including possible savings for consumers:

1. The average price to see a theatrical movie during the three-month period ending September 30 dropped 6.9%, to $7.84.  Most of this drop was due to fewer 3D and IMAX releases, which can ratchet average prices to higher levels..

2. Netflix, where consumers can get entertainment online for $8.99 a month, quadrupled its net profits in the third quarter, netting higher revenues -- $1.106 billion versus $905 million a year earlier -- and growing to  more than 30 million U.S. subscribers  and 40 million worldwide.

Consumers are naturally itching to get more home entertainment for less -- a lot less. Cable and satellite companies continue to fly the flag that they give consumers tremendous value by offering hundreds of channels in a monthly programming package.



But increasingly, consumers are realizing that much of what’s in those packages doesn’t suit their needs. Research continues to show that consumers regularly watch just 9 to 12 channels.

Companies like over-the-top station provider Aereo continue to do business, especially with consumers who can’t afford those big-ticket monthly TV packages.

Some consumers like to package disparate services – such as Aereo, Netflix, HuluPlus, over-the-air antennas, and whatever can be pulled freely from online video platforms -- to satisfy their in-home needs.

An FCC report that looked at expanded basic cable programming services through January 2012 found an average monthly price of around $65.

But the monthly programming bills from many major cable and satellite providers can be twice as high -- up to $110 to $120 a month. HDTV services are a major reason, as well as premium channels and more capable set-top boxes.

Comcast and other providers have tried to offer pared-down packages for just under $20 a month. Some of these plans haven’t been that successful.

Content owners believe they hold the cards to extracting the revenues they need to grow -- wherever the new markets transform and end up. Until then, most consumers will seemingly continue to overspend for access to entertainment they might want.

1 comment about "Are Entertainment Prices Peaking -- Or Consumers Overspending? ".
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  1. Doug Garnett from Protonik, LLC, October 22, 2013 at 2:57 p.m.

    The fascinating truth is that assembling entertainment away from cable will probably end up costing more. Sure, Netflix is $9.00 a month. Except we can only use it 2 or 3 times a month because it has such limited content. Then there's renting or buying movies from iTunes, Amazon. And the cost of a Hulu subscription. Then all the in-app purchases (since without cable we'd spend far more time there)... Oh, and the broadband connection, devices, and all that to support it. Reality? $100 a month's going to end up looking cheap compared with the brave new world of overpriced entertainment that will result from all this "cheap". That said, we have EVERYTHING on our cable and don't spend over $100 for it (Comcast). So the $110 to $120 seems exaggerated.

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