Streaming TV Services Aren't Such a Bargain Anymore
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Are streaming TV services still cheaper than traditional cable in 2020?
Here's your Money Briefing for Monday, July 6th. I'm J.R. Whalen for The Wall Street Journal. The average U.S. household spends about $100 a month for a traditional pay TV package. Over the past few years, that's pushed millions of Americans to cut the cable TV cord and sign up for leaner, cheaper services that offer TV over the Internet. But many of those services aren't so cheap anymore.
These streaming TV companies really broke into the market over the past four years, promising really low prices for some of the same sorts of channels that you'd get from your cable or satellite TV company for $80, $100 more. Their answer has basically been, take it or leave it.
So is cutting the cord as good a deal as it used to be? And how are streaming services dealing with the lack of live sports during the pandemic? Our reporter Drew Fitzgerald will be here with answers after the break.
Which streaming services have recently raised prices and by how much?
Last week, Google raised the cost of its basic YouTube TV package by 30% to $65 a month. Plenty of other services offering TV over the internet have done the same thing, and that means smaller savings for Americans who chose to cut the cord. Our reporter Drew Fitzgerald is here to discuss. So Drew, YouTube TV isn't the only streaming service to raise its prices recently.
That's true. Another service that's focused on sports called BuboTV also is set to raise its price by about $5 for most packages later this summer. And if you look back over the past two years, virtually every online live TV service that offers these bundles of channels has raised prices. So why are prices going up? Well, these companies give a couple reasons for why prices are going up. The main is that they say the cost of channels is higher to them, and they're passing that cost on to customers. There are plenty of examples of major media companies, whether they're Disney or WarnerMedia owned by AT&T or others, raising the price that they charge other TV companies to carry their channels. Another reason is that these companies simply can't.
Why are streaming-TV bundle prices increasing despite competition?
I talked to the CEO of FuboTV, who said that despite what some people say, most of the people who subscribe to his service show that they want more channels and they want a bigger bundle. They've shown that by the amount of time they spend watching TV.
You know, we hear about the so-called streaming wars, and you'd think the competition would lead to lower prices for consumers, but it really hasn't. Why is that?
There are a couple reasons. One is because there's a real difference between streaming TV and streaming video. If you look at on-demand services that have pre-recorded sitcoms, movies, TV shows, and the like from Netflix or Disney+, or HBO Max, which you can download, prices for those are generally going lower, and they offer a lot of content because there is a bit of a war, a price war, among these companies to get users' attention. The market for live TV is different. If you want to watch live sports or have a favorite TV news channel, you can get that from a few different places. But there hasn't been as much competition on price over the years in that particular market. And part of the reason for that is the companies that offer these channels know that people who aren't interested in live sports or live TV have already left.
Or if they haven't, they're probably going to leave soon. And those that have stuck around are willing to pay a premium for it.
And there's gotta be some sticker shock from customers. How are the streaming companies dealing with that?
So a lot of the prices for these online TV packages are slowly drifting towards where the prices are for a traditional cable or satellite TV package. And that's led a lot of people to realize that they're not saving that much money when they use these services. Now, there's still a savings, compared to most traditional packages. That's for sure. And these companies will point out that there's not just savings, but a lot more flexibility and user-friendly interfaces that they bring to the table that some of the older legacy TV packages don't offer.
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Chapters
6 chapters
1
Are streaming TV services still cheaper than traditional cable in 2020?
0:05–1:02
2
Which streaming services have recently raised prices and by how much?
1:02–2:07
3
Why are streaming-TV bundle prices increasing despite competition?
2:07–4:23
4
How does live TV and sports make streaming bundles more expensive?
4:23–5:46
5
Are cord-cutters regretting their decision as prices rise?
5:46–6:22
6
How has the pandemic and lack of live sports affected subscriber behavior?
6:22–6:40
Speakers
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