Advanced Television

Analysis: SVoDs nearing price ceiling

February 28, 2022

By Colin Mann

Findings from business intelligence company Morning Consult suggest that US consumers’ ideal price point for streaming services is $12 (€10.70). That price showed no movement from a 2019 survey. Consumers’ optimal price for ad-supported services also held steady at $10.

Analysis was conducted using the Van Westendorp model, a model that finds an optimum price point by considering what prices consumers believe are “too expensive” and “too good to be true”.

According to  Sarah Shevenock, entertainment reporter at Morning Consult, Americans’ acceptable price range for streaming services showed slight movement from the 2019 survey. The bottom of the price range for ad-free services increased by a dollar, from $10-$16 to $11-$16, while consumers’ preferred range for ad-supported services grew from $8-$12 to $8-$14. Netflix’s new $15.50 standard plan is only 50 cents below what Americans said is the highest acceptable price for a Netflix-like streaming service.

“As subscriber growth slows in some regions due to saturation and competition from streaming upstarts, services are tasked with extracting more revenue from existing subscribers,” notes Shevenock. “Some are hoping new strategies such as merchandise shops or live events will generate more money, attention and loyalty from their existing customer bases, in addition to raising prices.”

“Netflix and HBO Max are quickly approaching the top of consumers’ preferred price range, while others such as Disney+ and Apple TV+ still have room to go higher,” she advises. “Given that consumers haven’t fundamentally changed their minds in the last three years about how much a service should cost, additional increases could spur consumers to reconsider the number of subscriptions they can afford. It is a delicate game of which companies such as Netflix are well aware, but for now, they think the added revenue is worth the risk of losing some subscribers,” she concludes.

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