The Rising Cost of Online Video Streaming

Netflix is changing the way many people consume media. It offers thousands of television episodes and movies for immediate playback on a computer, television, or other device that streams Netflix—including Xbox 360, PS3, Nintendo Wii, smartphones, and tablets—without any commercials.

Beyond eliminating commercials—a common complaint of television viewers—Netflix is a fantastic tool for those with extremely busy schedules. Many simply do not have time to watch a television show every week at a specific time, so having them available on Netflix offers a great alternative. Additionally, Netflix can often allow people to discover television shows they missed during their original television run, such as Gilmore Girls or Friends.

Netflix builds on the current binge-watching culture by releasing entire seasons of original programming all at once. It is also able to expand the content of its original programming, as it is not a television network. Overall, Netflix is a great alternative for a regular Cable television subscription with its offerings and flexibility.

Of course, times are changing, with alterations coming to Netflix and other online streaming services. These changes will directly affect new and old users, as well as Internet connections as a whole.

Netflix Subscription

Netflix is undergoing some pricing changes. Specifically, they have hiked the base price of $8.99 per month to $9.99 per month for new users. If you signed up prior to the price increase, Netflix will grandfather your subscription fee. This means they will not charge the extra dollar…for now. Older users indicate that they have varying word from Netflix about how long their subscriptions fees will remain the same, but the consensus is between one and two years.

Additionally, Netflix reports that the price will only affect those new users on the two-screen high definition option. Single screen users are unaffected, as are those on the premium subscription at four screens in high definition.

One reason for this pricing change is because in the past year, Netflix has partnerships with large labels such as Disney—which owns Marvel—allowing for a dramatic increase in the availability of popular superhero movies and related content. Netflix would not be able to produce Daredevil or Jessica Jones without this partnership. High-profile partnerships and original programming come with a large price tag. Netflix expects the current cost of producing original programming, $4.3 billion, to increase to $5 billion in the near future.

While this price is still cheaper than a Cable television subscription, Netflix’s price has been rising quite fast. $8.99 was only the entry price for one year before rising: it was the 2014 increase from $7.99. Could this be a trend? Only time will tell for sure, however, it is clear that Netflix is on the rise.

Streaming From Other Services

Netflix is not the only streaming service that is undergoing price changes. Hulu is also changing some of its pricing, though in a different way. At the $7.99 price point, Hulu users must still face advertisements while they watch programming.

Not long ago, Hulu initiated a new price tier for users wishing to eliminate commercials and watch their shows in the same way as Netflix. The cost for this new service at Hulu Plus is $11.99, even more than Netflix’s basic options. The advantage here is that for the current shows Hulu offers, it often uploads new episodes within a week of their original airdate.

Amazon Prime’s price tag is currently $99 a year. It does seem high, but Amazon Prime comes bundled with other services beyond online video streaming, such as faster free shipping. Nevertheless, Amazon Prime members—just like Netflix and Hulu users—are facing price increases. In 2014, Amazon raised its price of Amazon Prime by 25%.

Prior to this, Amazon had a reputation for affordable pricing on its products. However, it seems that when the price hike first occurred, Amazon increased the price just enough to cause many members to question if they should renew their memberships.

Push From Providers

Pricing increases from the streaming services themselves is not the only indicator that online video streaming is becoming an expensive habit. Internet service providers are taking advantage of the popularity of online video streaming as well as the amount of data that it takes.

Some service providers have announced varying data caps, from as low as five gigabytes to amounts such as 300 gigabytes. These data caps do not actually exist, as providers do have unlimited data. Nevertheless, after people hit the limit on their Internet connections, they will face charges such as $10 for every 50 gigabytes over the data cap.

It does not stop there. There are hints that service providers are beginning to think about restructuring the way they price data. This may even mean charging higher prices for those who make use of services such as Netflix, Hulu, and Amazon Prime Instant Video.

The Takeaway

Online video streaming remains a decent alternative for a cable connection. However, it is becoming more expensive to maintain both a streaming service subscription and a higher data cap on your Internet connection. There are a few options to keep costs down, including putting up with some commercials on Hulu or remaining on single screen service with Netflix.

The biggest option to reduce the price on your monthly Internet service bill, however, is to call Billshark. Negotiating on your behalf with service providers to achieve lower prices on your bills is what we do. Once we are successful in our negotiations, we split the first year of savings with you.