Entertainment Costs Are Rising. Will Consumers Still Buy?

Entertainment pricing keeps climbing. Will consumers keep buying?

Walt Disney is raising its cheapest one-day ticket to Disneyland -- now $104. Some other tickets, annual passes and parking fees will see hikes of up to 25%. This comes a year after price hikes for Disneyland/Disney California Adventure by 18%.

Why the current change? In particular, there is an elaborate expansion -- a new “Star Wars”-themed part of Disneyland, with Disney expecting huge crowds.

We keep paying more for all kinds of entertainment. Theatrical movie prices are higher -- averaging $9.14 in 2018 from $8.97 in 2017. Tickets for attending professional sports -- football, baseball and basketball -- are also up.

TV home entertainment, all kind of digital/traditional TV-related content, is also higher. Traditional pay TV providers -- cable, satellite and telco -- are recording monthly price climbs.



In response, many new ultra-low-priced digital video packages have launched -- from Sling TV, DirecTV Now and others. But now those prices are beginning to go up, too.

And Netflix? It is around $10 to $12 a month for many of its subscribers, which seems like a deal. But one would expect some hikes in the near future. For many, paying for TV isn’t a luxury; it’s a necessity.

In 2013, the average U.S. household spent $2,482 on entertainment, or 4.9% of total household spending, according to the Bureau of Labor Statistics. In 2017, it rose to $3,203, which was up 10% over 2016. Average pay TV services cost consumers anywhere between $80 and $120 per month. So on an annual basis, TV makes up a good part of the entertainment budget.

Does this leave much left for Disney -- or other nontheatrical, non-sports, non-TV content entertainment? Consumers always seem to find a way.

Even with the current state of “cord-cutting,” TV providers will stay in the game, finding ways to offer and sell the idea of more “value” -- whatever that means. And that will be sold -- and advertised -- touting a  “low” price. Whatever that is.

2 comments about "Entertainment Costs Are Rising. Will Consumers Still Buy?".
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  1. Douglas Ferguson from College of Charleston, January 10, 2019 at 10:03 a.m.

    That's a very good question! Aside from our personal preferences for letting intrusive advertising subsidize some of the program cost, and my views are no secret, no one really knows for certain how addicted the typical Netflix viewer has become to the ad-free experience. Maybe the cost will lead to Hulu-type prices (subscription plus ads) for most. Or maybe young viewers will increasingly just-say-no to any advertising. I wish I knew.

  2. James Smith from J. R. Smith Group, January 10, 2019 at 9:38 p.m.

    Doug:  Netflix knows.  Lot's of amazing data behind that walled garden.

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