The Town with Matthew Belloni Price Hikes and the Streaming Class System
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Oct 10, 2023 The podcast explores the increasing cost of streaming services, the emergence of a class system within the industry, and the potential consequences of price hikes. It also delves into Netflix's advertising initiatives and challenges, discusses a recent event at Nia Studios and the opening of the Sphere in Vegas, and explores the new concert experience known as the Sphere.
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Streaming’s New Two-Tier Class System
- Streaming services are shifting from a single low-cost ad-free model to a two-tier system with expensive no-ad tiers and cheaper ad-supported tiers.
- This class system reflects the industry’s need to increase profits and push users to the more lucrative ad-supported tiers.
The Evolution of Streaming Pricing
- The original appeal of streaming was its low cost compared to cable, but that model can’t last as companies must focus on profitability.
- The streaming market is segmenting with essential services like Netflix as a base and other services competing in a more complex ecosystem.
Ad Tiers Drive Streaming Revenue
- Ad-supported tiers generate more revenue per user, prompting most streamers to push subscribers towards cheaper, ad-based plans.
- Netflix’s ad tier is still small but expected to grow due to its lower price and consumer preferences.