Premium streaming services of all kinds are making drastic decisions -- promotions for major monthly fee reductions to hopefully garner long-term subscribers.
Hulu offers 99 cents a month for a year -- a limited, online-only deal that is available only to new and eligible returning subscribers. Another holiday-season promo, from discovery+, offers the first three months also at 99 cents a month. Paramount+ is offering one month free.
Already streamers have expected net financial losses,
including Disney+, Apple TV+, Paramount+ and Peacock.
Everyone expects streaming platform costs to rise in the coming months or years -- especially when it comes to seemingly nonstop multibillion-dollar TV and movie production budgets.
Good news: Churn rates -- subscribers leaving existing services -- continue at modest single-digit levels. Current low monthly promotions follow up on all those initial free year-long deals streamers made with Verizon, T-Mobile and others.
More good news: Consumer spending, post-pandemic, is gaining stream -- even as there are supply-chain issues, resulting in shortages of products, and rising inflation, which may be temporary.
The streaming industry is not your cable operations business. Streamers may never get to achieve those high profit margins traditional pay TV providers enjoyed in the 1990s and 2000s.
The realization now might be these new streamers -- owned by traditional movie and TV companies -- not only need to get more aggressive when it comes to spending billions on new content, all to keep pace with Netflix and Amazon, but to be keenly focused on long-term consumer acquisition efforts for years to come.
Look at Netflix, the industry leader. Most of its customers are at a $13.99 price point right now. That seems expensive versus Apple TV’s $4.99, Disney’s $7.99 and Paramount+, also at $4.99.
Is Netflix losing consumers overall? Globally, no. But North American subscribers dipped slightly -- 430,000 -- to 73.9 million.
While premium streamers look to offer low price promotions, what about Netflix? Did it also lower its price? Not that we can tell. The marketplace decides.