‘Streamflation’ nation: Streaming platforms are overcharging us for subpar content

United States

Consumers are facing significant price hikes from streaming services for digital entertainment. Once hailed as a cost-effective, superior alternative to traditional cable TV, streaming platforms are now under scrutiny for what appears to be a strategy of overcharging for often subpar content.

The surge in subscription costs, a stark departure from the initial affordability that once defined these platforms, is attributed to a confluence of factors. Key among these are the substantial financial losses borne by service providers and the rising expenses associated with content production and acquisition.

This trend, often referred to as “streamflation,” signifies a shift in the streaming market from a cost-effective service to a more expensive element of modern entertainment consumption. As households adjust to the reality of increased living expenses, escalated costs of streaming services add another layer to the financial burden, compelling consumers to reassess their digital entertainment choices and spending strategies.

The impact of price increases extends beyond financial implications; it marks a significant shift in consumer behavior and the value perception of digital content. The era of low-cost streaming is being eclipsed by a new reality where services like Netflix NFLX, -2.52% and Disney+ DIS, -0.93% mirror, or even surpass, traditional cable subscriptions. In 2008, Netflix’s unlimited streaming service was $ 8.99 per month compared to $ 15.49 now. Similarly, Disney+, which debuted at $ 6.99 per month, now demands double that for ad-free service.

Find effective ways to manage increased streaming costs

This escalation in prices is a direct response to the intensifying competition in the streaming industry and the enormous investments made in securing and producing high-budget content. As streaming platforms strive to outdo each other in quantity-over-quality offerings, the financial burden inevitably falls on the consumer, ushering in a new era of pricier, and not necessarily more entertaining, digital entertainment.

As consumers confront higher subscription fees, it becomes imperative to find effective ways to manage increased streaming costs. A vital first step is to meticulously audit all existing streaming subscriptions along with their payment method, cost, and due dates to identify and eliminate any forgotten or overlapping subscriptions. Simplifying payment methods by using a single credit- or debit card for all streaming services can significantly aid in budget tracking. Moreover, rotating streaming services based on content consumption patterns offers a pragmatic approach, ensuring payment only for actively used services. Setting up alerts for the end of free trials is another crucial tactic that prevents unwanted charges for services that were initially intended as short-term trials. 

Bundling different streaming services is another cost-effective solution. For example, families with children might find great value in a bundle that combines kid-friendly programming with general entertainment. Single adults might prefer a more general entertainment-focused bundle.

Legal gray areas

As streaming service prices climb, there’s a growing shift toward practices that reside in a legal gray area, including: 

1. Password sharing and video piracy: While common, an increasing trend of sharing streaming account passwords raises significant legal issues. Laws in Tennessee, California and other states, as well as U.S. federal statutes such as the Computer Fraud and Abuse Act, categorize unauthorized access and sharing as potential criminal activities. Despite these risks, the financial pressure from rising subscription costs will drive more users to share accounts, as well as rejoin various torrent websites, potentially leading to a resurgence in video piracy.

2. VPN usage for streaming: While using a VPN is legal in many countries, employing it to access content not licensed in one’s region infringes on copyright permissions. This practice, though not directly illegal, exists in a precarious position concerning streaming services’ terms of use.

3. Third-party streaming apps: These unofficial platforms offer content outside authorized channels, often leading to copyright infringement. While convenient, they pose risks to both legal compliance and user privacy and security.

The potential backfire of streaming service price hikes reflects a complex dilemma. Intended to bolster revenues, such increases might instead propel consumers toward alternative, less legal means of content consumption. As costs escalate, the temptation to engage in password sharing, VPN usage, and reliance on third-party apps intensifies. This shift not only skirts the bounds of legality but also undermines the revenue models streaming platforms rely on. Ironically, the very strategy designed to enhance profits could trigger a resurgence in video piracy, eroding the customer base and revenue. Streaming services now face a critical challenge: how to balance pricing and content quality to retain customer loyalty and ward off the lure of gray area practices.