The cost of streaming TV services is on the rise, and there are a few reasons for this. The first reason is that the technology to stream TV shows and movies over the internet has become more advanced. This means that streaming services have to pay more for the rights to show these shows and movies. Another reason for the increase in prices is that streaming services are trying to compete with traditional cable TV providers. Cable TV providers have been able to keep their prices high by bundling their services with other services, such as home phone and broadband internet. But streaming services can’t do this because they need to make money from each individual show or movie that they stream. So they have to charge more for their service overall. Finally, there are just a lot more streaming options available now than there were a few years ago. This means that people are able to watch more shows and movies than ever before without having to pay extra for them. But as the number of options grows, so does the competition among these different streaming services. This competition has led to higher prices for all of them ..
There’s not a single streaming TV service that hasn’t raised its prices at least once. At the time of writing in January 2022, Netflix is the latest service to do it. Not long ago, YouTube TV made waves for raising prices too. Is there a reason for all this beyond corporate greed? Let’s find out.
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Streaming TV in the Beginning
Let’s go back to the beginning of streaming TV services. YouTube TV wasn’t the first on the scene, but its trajectory is very similar to other services. It launched in 2017 with around 40 channels, including ABC, CBS, FOX, and NBC, for $35 per month.
For the time, it offered a very good selection of channels, but like every other streaming service, it had some holes. This is due to how cable channels work. Companies such as Viacom own handfuls of channels that they won’t split up. You get all of them or none.
This is why the idea of “a la carte cable” has never been possible. In order for YouTube TV to offer you TBS, it needs to make a deal with Turner Broadcasting that includes its other channels, such as TNT, AMC, and CNN. You can’t only pay for TBS because YouTube can’t only pay for TBS.
So, to fill the gaps in programming that may keep some people from subscribing, streaming services make deals to get more channels.
Bigger Bundles With Bigger Price Tags
In 2018, YouTube TV raised prices to $40 per month with the addition of TBS, TNT, CNN, and more channels. A year later, the price went up to $50 per month as Discovery channels were added. Then in 2020, the price increased to a whopping $65 per month with the addition of Viacom channels.
In just three short years the price of YouTube TV went from $35 to $65 per month. What started as a small package of around 40 channels has ballooned to over 85. This same story has played out on Sling TV, Hulu Live TV, Fubo TV, and Playstation Vue (until it shut down).
Why did Playstation Vue shut down? Sony cited “expensive content and network deals” as the main cause for getting out of the industry. That’s the same reason why your monthly bill keeps getting higher and higher. You’re paying for those network deals whether they matter to you or not.
Media Companies Call the Shots
When services raise their prices, people understandably get upset at the service, but that’s not entirely fair. Streaming services and subscribers like you are all essentially at the mercy of the companies who own the channels.
People say “if it just had ESPN it’d be a perfect service!” Well, it’s not possible for even a behemoth company like Google to get only ESPN for YouTube TV. Disney owns ESPN and bundles it with a bunch of other channels. So you get your wish of ESPN, but now you’re paying for a bunch of other channels too.
You might think that streaming services would be battling to undercut their competitors, but the prices are out of their hands to some degree. A streaming service that has Viacom, Disney, and FOX channels is going to cost pretty much the same as any other service that has those same channels. The media companies are setting the prices.
Streaming services don’t have much pull, either. If they disagree on pricing, the media company can simply say “okay, then you don’t get our channels.” And what happens when these situations occur like it nearly did with YouTube TV and Disney? People get mad at the streaming service and go somewhere that does have the channels. It mostly hurts the streaming service, not the media company.
Costs Are Rising Everywhere
The inflating costs of live TV may not be exclusive to streaming TV. “Old school” cable TV prices have been slowly increasing over the years as well. In some cases, streaming TV services cost the same or more than cable.
Comcast—one of the biggest cable TV providers—raised TV prices by 3% across the board in late 2021. Broadcast TV fees—ABC, CBS, FOX, and NBC—and regional sports fees have gone up considerably in the last five years. Comcast is in the same position as YouTube TV; it’s not the one setting those prices.
So it seems that TV is getting more expensive no matter how you get it. Streaming TV and cable companies are all at the mercy of the media companies. The main difference is streaming TV services started with low costs, but it was unsustainable to add content and keep those aggressive prices.
Will It Ever Get Better?
This all sounds pretty grim and it truly is a crappy situation for everyone but the media companies. Is there any way to get out of this nasty cycle? Unfortunately, probably not.
The media companies are the ones making this situation as bad as it is and there’s not much incentive for them to fix it. People want the channels they want and they expect their streaming service to have them. The pressure is on those services to get the channels, and the media companies are more than happy to force them to license more than they want.
Sling TV is one of the few services that sorta gives you the choice of paying for only the channels you want, but it’s still just picking between bloated bundles. Everyone wants the dream of “a la carte TV,” but there’s nothing pushing media companies to offer that, and if they did, it’d likely be a lot more expensive than you’d want.
The cheapest way to watch TV today is still good ‘ol OTA TV. A simple, affordable antenna can bring in more channels than you might think, including the big ones like ABC, CBS, FOX, and NBC. The picture quality is sometimes much better than cable or streaming, too.
The moral of the story is prices keep rising because the cost of the content keeps rising. There aren’t many winners in this situation. We’re all being forced to choose between paying more than we want or going without.
RELATED: Why Free OTA TV Beats Cable on Picture Quality
