Peacock Raising Streaming Prices Ahead of Paris Olympics

NBCUniversal’s Peacock subscription streaming service will raise its monthly fees by $2 beginning July 18 — just ahead of the streamer’s two-week live-stream of the 2024 Paris Summer Olympics.

Peacock Premium ad-supported monthly rate will increase to $7.99 or $79.99 annually for new subscribers. The ad-free Peacock Premium Plus will increase to $13.99 or $139.99 per year. Existing subscribers will see the price hike effective on their next billing date in August.

The summer Olympics are slated for July 26 to Aug. 11.

The price hike, the second in two years, comes at a key moment for Peacock, which added 3 million subscribers in the first quarter ended March 31, to end the fiscal period with 34 million subscribers — up 55% from 21.9 million subs in the previous-year period.

The streamer upped quarterly revenue 54% to $1.1 billion, from $714.2 million, while Peacock’s pre-tax operating loss narrowed to $639 million.

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Capterra: Nearly 40% of SVOD Subs Would Cancel Service If Monthly Price Rises

Consumers’ growing weariness with the number of subscription streaming video services on the market, including ongoing price hikes, is reaching a boiling point.

New data from software recommendation firm Capterra found that 38% of survey respondents said that if one of their current streaming services increased in price, they’d cancel their subscription outright, compared to a smaller percentage that would be willing to shoulder increased costs.

According to the survey of 1,000 online respondents, more than 76% said financial pressures are leading to subscription burnout, a key topic likely to surface during the Jan. 16 Federal Trade Commission hearing regarding online subscription services.

“Understanding why consumers cancel subscriptions and addressing burnout are key for businesses to thrive in today’s market while prioritizing customer needs,” Max Lillard, senior finance analyst at Capterra, said in a statement. “Success hinges on closely monitoring shifting consumer preferences towards more flexible, cost-effective, and personalized subscription models.”

Nearly half of the consumers surveyed expressed willingness to switch to a lower-cost subscription tier should prices increase. Most respondents (80%) say they prefer tiered models that offer flexible pricing as opposed to flat-fee subscriptions, which highlights how offering various plans can help customers stretch their dollar and allow businesses to prevent customer churn in the midst of economic pressures.

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The survey also highlights the impact of subscription fatigue on consumer behavior. An increasing number of users find managing multiple subscriptions cumbersome, with 45% citing this as a reason for cancellations. Furthermore, 47% question the value they receive for their subscription, indicating a gap between consumer expectations and perceived benefits.

The data comes ahead of the FTC holding a virtual hearing on amendments to the current “Negative Option Rule” that enables third-party online services to engage in prenotification plans, continuity programs, automatic renewals and free-to-pay conversions on consumers using services without paying through free trials and promotional offers.

The federal government is proposing online subscription services offer easier access to a so-called “click-to-cancel” option for subscribers.

Netflix Looking to Raise Subscription Pricing After Hollywood Actors’ Strike Ends

Netflix is reportedly looking to implement subscription price hikes after the ongoing actors’ strike is concluded — the streamer’s first price increase since January 2022.

The possible price hike, first reported by The Wall Street Journal, which cited sources familiar with the situation, would begin in North America and mirror similar planned price hike implemented by SVOD rival Disney+ on Oct. 12. Prime Video is launching an ad-supported option in early 2024. In July, Netflix canceled its $9.99 basic ad-free tier in the U.S.

SVOD services have increased their monthly fees around 25% as they (with the exception of Netflix) look to transition away from money-losing businesses.

The Journal also reported that Disney is also considering adding a live-sports option to Disney+ outside of the U.S., since most of its domestic live-sports agreements are tied to ESPN. Separately, Warner Bros. Discovery’s Max streaming service said it would offer live sports in the near future.

Peacock Streaming Service Raising Subscription Prices for First Time

NBCUniversal’s Peacock subscription streaming video service is raising its prices for the first time since launching on July 15, 2020. The platform on Aug. 17 will up the price of the ad-supported Premium option to $5.99 from $4.99 monthly. The ad-free Premium Plus option will increase $2 to $11.99.

The price hikes are effective immediately for new subscribers, with the existing 22 million Peacock subs being notified of the change starting today by email.

Peacock price increases mirror subscription fee hikes among SVOD competitors, including Apple TV+, which now charges $2 more ($6.99), and Disney+ and Hulu, which upped their ad-free pricing to $10.99 and $14.99, respectively. Disney’s ad-supported option launched late last year for $7.99, while Hulu’s ad-supported option increased to $7.99. Ad-free Hulu increased to $14.99 per month.

Warner Bros. Discovery’s Max ad-lite option costs $9.99 monthly, or $99.99 annually, while the ad-free tier costs $15.99, or $149.99 annually. The Max Ultimate Ad Free tier now costs $19.99 a month or $199.99 per year.

Peacock will begin live-streaming the 2023 Women’s World Cup Soccer tournament from New Zealand and Australia beginning July 20. The event is part of Peacock’s burgeoning live sports line-up that includes NFL Sunday Night Football, an NFL Wild Card playoff game in January, Premier League soccer from the United Kingdom, Big 10 and Notre Dame college football, and the WWE’s wrestling.

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Hulu Upping Monthly Ad-Free Subscription Fee to $14.99

Hulu Sept. 6 announced it will increase the price of its ad-free subscription streaming video service by $2 to $14.99 per month, beginning Oct. 10. The price hike comes about a year after the platform raised the price of the ad-free tier by $1 to $12.99. The price for the ad-supported tier increased by $1 to $7.99 monthly in August.

Hulu’s ad-free price hike matches the ad-free tier price for both Amazon Prime Video (with Prime membership) and HBO Max — heretofore the most-expensive SVOD platforms.

The change follows a $2 price hike for Disney+ (from $7.99 to $9.99) and a $3 monthly upcharge for ESPN+ ($6.99 to $9.99) announced in August.

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Hulu reported 42.2 million SVOD subscribers in the most-recent fiscal period, ended July 2. When including online TV platform Hulu + Live TV, the Hulu brand has a combined 46.2 million subs.

Amazon Raising Prime Membership Fee Up to 43% in Europe; Taking Delivery of 100,000 Electric Vehicles by 2030

Amazon July 26 announced it will up the annual price of its Prime membership program as much as 43% across parts of Europe as the costs associated with e-commerce — i.e. shipping — continue to escalate. The price hikes also affect the Prime Video streaming service and other Prime features included with the membership.

The annual membership fee will increase in the U.K. 20% to £95 ($113.80) from £79 ($94.60) on Sept. 15. In France, Prime members will see the annual fee jump 43% to €69.90 ($70.80) from €49 ($49.64). Spain and Italy will see 39% price hikes, while Germany gets a 30% annual fee hike. The price increases follow a 15% increase in the U.S. announced in February.

Amazon has also significantly upped entertainment and live sports spending. In addition to closing its $8.5 billion acquisition of MGM Studios, the streamer is paying the NFL $11 billion for 11 years of exclusive rights to “Thursday Night Football” beginning this season.

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Prime Video this month for the first time secured rights to live stream European Champions League soccer matches in the U.K.

Separately, Amazon last week announced it would take delivery of 100,000 Rivian electric vehicles by 2030 for use delivering Amazon packages in Baltimore, Chicago, Dallas, Kansas City, Nashville, Phoenix, San Diego, Seattle and St. Louis, among other cities. This rollout is just the beginning of what is expected to be thousands of Amazon’s custom electric delivery vehicles in more than 100 cities by the end of this year.

Amazon, which owns a stake in Illinois-based Rivian, took a $7.6 billion loss on that stake in the first quarter, ended March 31.

Amazon is currently the largest single global customer of the Mercedes-Benz Sprinter van used to deliver e-commerce purchases locally nationwide.

Amazon reports second-quarter (ended June 30) financial results on July 28.

Netflix Raises Prices in the U.K., Streamer’s No. 2 Market

Netflix is raising prices across all of its subscription plans in the United Kingdom and Ireland — the streamer’s No. 2 market after North America. Prices are increasing from £1 to £3 ($1.32 to $3.95) for a region totaling almost 15 million subscribers, according to Ampere Analysis. Netflix ended 2021 with almost 222 million subscribers globally.

“Our updated prices reflect the investment we have made in our service and catalog and will allow us to continue making the series, documentaries and films our members love as well as investing in talent and the creative industry,” Netflix said in a statement. “We offer a range of plans so members can choose a price that works best for them.”

Indeed, the price hike, the second in the region in 18 months, mirrors Netflix’s strategy upping fees in mature markets with low churn. That contrasts with the SVOD pioneer’s competitors that are embracing lower cost ad-supported pricing tiers on top of SVOD price hikes.

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Speaking on the Netflix fiscal call earlier this year, Greg Peters, COO and chief product officer, said price hikes reflect in part that the streamer is doing something right.

“[It’s] really our signal that we’ve done a good job at sort of creating this more value, and it’s the right time to ask for a little bit more to keep that going,” Peters said.

Disney will launch a lower-priced ad-supported streaming option later this year, more than a year after it raised the Disney+ subscription by $1 to $7.99. Last December, Disney raised by $5 the monthly fee for its Hulu+Live TV online television platform.

Analysts: Netflix Eyeing Flat Q3 Sub Growth, Near-Term Price Hike

In the rollercoaster COVID-19 era, few media companies have shined as brightly as Netflix. The SVOD pioneer has defied odds and naysayers, adding more subscribers (26 million) in the first six months of the year than it did in all of 2019. It ended June with 193 million subs worldwide.

As the third quarter closes on Sept. 30, the SVOD pioneer is facing challenges, not the least of which is a probable near-term subscription price hike. Netflix hasn’t raised its domestic fee since May 2019 when the most-popular plan increased $2 to $13 monthly.

“After a change in language regarding pricing on the [Q2] call, we believe a potential hike is probable in the near to midterm,” Alex Giaimo, analyst at Jeffries, wrote in a note. “In Q1, Netflix said that they were ‘not even thinking about price increases,’ while the Q2 language was more open-ended.”

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Jeffries contends price hikes from $1 to $2 monthly in North America and Europe could see Netflix add near $1 billion in fiscal 2021 revenue. A similar price hike in Europe, the Middle East and Africa (EMEA) could add $700 million.

“We have confidence that Netflix can raise prices in international markets, given its deepening content library and outsized consumer value proposition,” Giaimo wrote.

On the domestic front, Netflix is facing blowback from politicians and public action committees regarding a small French movie, Cuties, critics say exploits young girls. The streamer also received a letter from GOP senators questioning its motives behind greenlighting an original series based on a book by a Chinese author accused of being pro-Beijing government and anti-ethnic Uyghur Muslims. Both situations have seen increased calls on social media to cancel Netflix subscriptions.

Wells Fargo analysts contend Netflix will add 2.5 million subs globally in Q3 — down from a previously projected 5 million due to increases in subscriber churn. The culprit: a fivefold churn increase to 4.7% in one-week subscriber defections due to Cuties. The analysts said that could result in a sub loss of 28 million. Netflix is projecting a global sub gain of 2.5 million.

Meanwhile, Michael Pachter, media analyst with Wedbush Securities in Los Angeles, said he would surprised if the Cuties controversy extended beyond the United States. The analyst said that with one-third of households considering themselves religious, it’s possible Netflix saw a spike of 1% to 2% over its normal churn.

“Combine that with the pull-forward of new subscribers from shelter-in-place. and they could deliver disappointing domestic subscriber growth,” Pachter said in an email.

The analyst said he would be “shocked” if Netflix raised prices in the face of new competitors such as Disney+, Peacock, Apple TV+ and HBO Max.

“They had no competition before and now they have [competition] priced lower, Amazon content is getting better, and HBO Max will someday figure out how to get their product on Roku-powered TVs,” Pachter said.

“Yes, I think that they can raise the price and that the brand is super strong, but the cult [Netflix bulls] values them at ridiculous levels because the cult believes in unfettered growth, and any shift in that narrative will disappoint them,” he said. “I still don’t expect a price hike.”

Netflix reports third-quarter results Oct. 20.

Reports: Netflix Subs Don’t Want More Price Hikes, Open to Ad-Supported Streaming

With Netflix set to release financial results on July 17, two new research reports suggest the SVOD behemoth’s subscribers would consider ad-supported content instead of paying higher monthly fees.

While Netflix doesn’t stream advertising and has made no suggestion it plans to, industry scuttlebutt contends the No. 1 SVOD service might have to consider the option to offset burgeoning content costs and debt.

Recent comments from NBC Universal and Hulu executives have rekindled speculation as to whether Netflix will introduce an ad-based tier. Hulu has always offered a less-expensive ad-supported option, while NBC Universal’s pending streaming service will be both ad-supported and subscription based.

According to new TDG Research, a third of Netflix users would consider changing tiers, more than half of which are moderately likely to or definitely would switch.

While Netflix has consistently spurned ads, the decision is not entirely within its control, according to Michael Greeson, president of TDG and SVP of Screen Engine/ASI.

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Indeed, with two of Netflix’s most-streamed programs — “Friends” and “The Office” — set to leave the platform after 2020, the SVOD service in under increasing pressure to spend on original content to fill the void.

“Netflix’s response to its thinning third-party library is to spend more on originals, which it’s gambling will keep subscribers from jumping ship,” Greeson said in a statement. “But with half or more of its most-viewed shows being owned by three studios, each of which is launching their own DTC services, how long can you convince 55+ million U.S. consumers that your service is worth paying a premium price, especially compared with Hulu (offers an ad-based option), Amazon Prime Video (free with Prime), and Disney+ (coming in a $6.99/month)?”

TDG contends Netflix will need to increase the subscription fees (which it recently did), or create a new revenue stream, such as advertising.

“This should not be an either/or decision, but that’s what it is,” Greeson said.
A separate survey of 1,000 Netflix subs by KilltheCableBill.com found more than 24% of respondents thought their plan was too expensive.

TDG’s research from late 2018 found that Netflix’s most recent price increase strained the limit of the service’s value, even before popular third-party shows are pulled from the lineup.

The research firm contends Netflix could “bullet-proof” its future with the introduction of a less-expensive ad-supported pricing plan.

“The stage is shifting,” Greeson said, “and if, like Blockbuster [Video], Netflix fails to evolve in a timely fashion, the company may see its domestic fortunes reversed.”

Netflix Spain Raises Prices

Netflix is continuing to roll out price hikes across Western Europe with Spain reportedly the latest country to see a €2 monthly increase to €12.99 ($14.80) from €10.99 ($12.52).

Netflix previously raised prices in Germany, Austria and Switzerland.

Netflix Spain also upped the fee for Ultra-HD on up to four devices to €15.99 ($18.22) from €13.99 ($15.94). The basic plan remains unchanged at €7.99 ($9.11) per month.

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Netflix in January raised by $2 its most-popular plan in the U.S. to $12.99 from $10.99. The basic $7.99 non-HD plan increased to $8.99, while the premium plan allowing four simultaneous 4K streams increase to $15.99 per month from $13.99.