After years of charging low prices for their services, generating billions of dollars in losses, streaming companies spent the last year readjusting their plans upwards, following the mantra that took over the world of startups, in which profitability started to count more than growth .
At first analysis, the strategy seemed risky, given the possibility of reducing the subscriber base. But the price escalation does not seem to be keeping consumers away from the world of streaming.
A survey carried out by Bank of America (BofA) shows that consumers are subscribing to and spending more and more on these services – at least in the United States.
According to a bank report published on the website Marketwatch, American spending on streaming in January this year rose more than 70% compared to 2021, with the number of households paying more than US$100 per month on these services (more than double on the same basis of comparison). The number of families spending less than US$20 fell by around 16% in the same period.
For BofA, the movement is driven by younger generations, demonstrating the loss of strength of the traditional television and cable TV industry among younger people.
“Millennials and Generation X are paying more for streaming, as they pay for multiple subscriptions”, says an excerpt from the report. “These groups also see the largest share increases among total streaming subscribers over the past three years.”
The situation ends up paving the way for streaming companies to increase prices, without fearing a worsening of the churn, metric used to show the number of customers who cancel service in a given period of time. The bet is that consumers will accept the adjustments or migrate to cheaper options, with advertising running.
A survey released by The Wall Street Journal in August last year showed that the average cost of advertising-free plans grew by almost 25% in the United States, in a 12-month comparison.
Amid a more favorable scenario for adjustments, the expectation is that new adjustments will come. After increasing prices for the basic plan in the United States in October, from US$9.99 to US$11.99 per month, Netflix is expected to raise prices again in 2024.
This is UBS’s vision. In a report released on February 27, the research Swiss bank states that the measure, together with the prospect of increased revenue from the advertising plan and subscriber gains, should lead to 15% growth in revenue in 2024. In 2023, Netflix’s revenue grew 6.6% %, to US$ 33.7 billion.
In Brazil, the person who recently announced an adjustment in the price of streaming was Amazon. From March 8th, the monthly subscription will go from R$14.90 to R$19.90, according to an announcement made on February 8th. The annual plan will rise from R$119 to R$166.80.
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