reader comments 71 Streaming services like Netflix and Peacock have already found multiple ways to aggravate paying subscribers this week.
The streaming industry has been heating up. As media giants rush to establish a successful video streaming business, they often make platform changes that test subscribers' patience and the value of streaming.
Below is a look at the most exasperating news from streaming services from this week. The scale of this article demonstrates how fast and frequently disappointing streaming news arises. Coincidentally, as we wrote this article, another price hike was announced.
We'll also examine each streaming platform's financial status to get an idea of what these companies are thinking (spoiler: They're thinking about money).
Peacock's raising prices
For the second time in the past year, NBCUniversal is bumping the price of Peacock, per The Hollywood Reporter (THR) on Monday.
As of July 18, if you try to sign up for Peacock Premium (which has ads), it'll cost $7.99 per month, up from $5.99/month today. Premium Plus, (which doesn’t have ads), will go up from $11.99/month to $13.99/month. Annual subscription pricing for the ad plan is increasing 33.3 percent from $59.99 to $79.99, and the ad-free annual plan’s price will rise 16.7 percent from $119.99/year to $139.99/year.
Those already subscribed to Peacock won’t see the changes until August 17, six days after the closing ceremony of the 2024 Summer Olympics, which will stream on Peacock.
The pricing changes will begin eight days before the Olympics' opening ceremony. That means that in the days leading up to the sporting event, signing up for Peacock will cost more than ever. That said, there’s still time to sign up Peacock for its current pricing.
AdvertisementAs noted by THR, the changes come as NBCUniversal may feel more confident about its streaming service, which now includes big-ticket items, like exclusive NFL games and Oppenheimer (which Peacock streamed exclusively for a time), in addition to new features for the Olympics, like multiview.
Some outspoken subscribers, though, aren't placated.
"Just when I was starting to like the service," Reddit user MarkB1997 said in response to the news. "I’ll echo what everyone has been saying for a while now, but these services are pricing themselves out of the market.”
Peacock subscribers already experienced a price increase on August 17, 2023. At the time, Peacock's Premium pricing went from $4.99/month to $5.99/month, and the Premium Plus tier from $9.99/month to $11.99/month.
Peacock’s pockets
Peacock's price bumps appear to be a way for the younger streaming service to inch closer to profitability amid a major, quadrennial, global event.
NBCUniversal parent company Comcast released its Q1 2024 earnings report last week, showing that Peacock, which launched in July 2020, remains unprofitable. For the quarter, Peacock lost $639 million, compared to $825 million in Q4 2023 and $704 million in Q1 2023. Losses were largely attributed to higher programming costs.
Peacock’s paid subscriber count is lower than some of its rivals. The platform ended the quarter with 34 million paid users, up from 31 million at the end of 2023. Revenue also rose, with the platform pulling in $1.1 billion, representing a 54 percent boost compared to the prior year.
Sony bumps Crunchyroll prices weeks after shuttering Funimation
Today, Sony’s anime streaming service Crunchyroll announced that it’s increasing subscription prices as follows:
- The Mega Fan Tier, which allows streaming on up to four devices simultaneously, will go from $9.99/month to $11.99/month
- The Ultimate Fan Tier, which allows streaming on up to six devices simultaneously, will go from $14.99/month to $15.99/month
Crunchyroll’s cheapest plan ($7.99/month) remains unchanged. None of Crunchyroll’s subscription plans have ads. Crunchyroll's also adding discounts to its store for each subscription tier, but this is no solace for those who don’t shop there on a monthly basis or at all.
The news of higher prices comes about a month after Sony shuttered Funimation, an anime streaming service it acquired in 2017. After buying Crunchyroll in 2021, Funimation was somewhat redundant for Sony. And now that Sony has converted all remaining Funimation accounts into Crunchyroll accounts (while deleting Funimation digital libraries), it’s forcing many customers to pay more to watch their favorite anime.
A user going by BioMountain on Crunchyroll said the news is "not great," since they weren't "a big fan of having to switch from Funimation to begin with, especially since that app was so much better" than Crunchyroll.
Interestingly, when Anime News Network asked on February 29 whether Crunchyroll would see prices rise over the next two years, the company told the publication that predicting a price change for that time frame would be improbable.
Crunching numbers
Crunchyroll had 5 million paid subscribers in 2021 but touted over 13 million in January, (plus over 89 million unpaid users, per Bloomberg). Crunchyroll president Rahul Purini has said that Crunchyroll is profitable, but not by how much.
In 2023, Goldman Sachs estimated that Crunchyroll would represent 36 percent of Sony Pictures Entertainment's profit by 2028, compared to about 1 percent in March.
However, Purini has shown interest in growing the company further and noted to Variety in February an increase in “general entertainment” companies getting into anime.
Still, anime remains a more niche entertainment category, and Crunchyroll is more specialized than some other streaming platforms. With Sony making it so that anime fans have one less streaming service option and jacking up the prices for one of the limited options, it's showing that it wants as much of the $20 billion anime market as possible.
Crunchyroll claimed today that its pricing changes are tied to “investment in more anime, additional services like music and games, and additional subscriber benefits.”
Netflix starts killing its cheapest ad-free plan in June
In January, Netflix shared plans to eventually kill off its ad-free Basic plan in “some” of the countries where it sells subscriptions with commercials. Netflix said it would start pulling the plug on this plan in Canada and the UK. This week, UK subscribers reported receiving notice that the plan, which costs 7.99 pounds per month, would no longer be available as of June 4.
At that time, Netflix will automatically move relevant subscribers to its cheapest plan with ads, which is 4.99 pounds per month.
“You’ll save 35% with our new monthly plan,” the email starts off in big letters, as reported by TechRadar.
Netflix hasn’t confirmed that it will bring this change to the US, but it is expected since Netflix previously stopped selling the ad-free basic plan in Canada before doing the same in the US. If Netflix kills the plan in the US, long-time subscribers would be moved from an $11.99/month plan without commercials to a $6.99/month subscription with commercials. They’ll have the option to go ad-free again but for 29.2 percent more at $15.49/month.
Subscribers in the UK who already know they’ll be affected have shared their outrage:
“Great, so we either have to sit through ads every so often, or pay twice as much to get the Standard/Basic experience that we already do now (albeit only for another few weeks)? Nah, I think I'll pass, Netflix. Cheers, though...,” TechRadar senior entertainment reporter and apparent Netflix subscriber Tom Power said on X (formerly Twitter).
AdvertisementAnother X user used more colorful language:
@Netflix How can I put this simply? Oh yeah: Fuck you for pretending like you're 'saving' me 35% by eliminating the basic plan and forcing me to either watch adverts or pay 2x as much. I'll just unsubscribe, thanks.
After dominating subscriber counts, Netflix turns to ads
Netflix, like many streaming platforms, has been blunt about getting people to watch its content with commercials because it yields a higher average revenue per user (ARPU). When Netflix announced that it would start killing its cheapest ad-free plan in January, it happily noted that “the ads plan now accounts for 40 percent of all Netflix sign-ups in our ads markets."
Netflix's Q1 2024 earnings report shared this month showed that the streaming firm added more subscribers than expected for the quarter for a total of 269.6 million.
Netflix is also one of the few profitable video streaming services, reporting $2.3 billion in profits in Q1 2024. Its ARPU increased from Q1 2023 ($16.18) to $17.30.
A letter to shareholders dated April 18 reiterated Netflix’s interest in “scaling ads to become a more meaningful contributor to our business in ‘25 and beyond” to drive “additional revenue and profit pools.” Netflix even said it would stop reporting ARPU and subscriber numbers. Ads, whether yearslong subscribers like them or not, are a central part of Netflix's business now.
Fubo cuts 19 channels
Sports streaming service Fubo on Tuesday announced that it cut 19 channels on April 30 because it was unable to reach what it considered a fair deal for these channels with Warner Bros. Discovery (WBD).
Here are the networks that Fubo users suddenly lost access to:
- American Heroes
- Animal Planet
- Cooking Channel
- Destination America
- Discovery Channel
- Discovery Life
- Discovery Family
- Discovery Familia
- Discovery en Español
- DIY
- Food Network
- HGTV
- Hogar
- Investigation Discovery
- Motor Trend
- OWN
- Science
- TLC
- Travel
In a statement, Fubo claimed it offered WBD "market rate" for the channels but WBD "did not provide any counteroffer and insisted on continuing to offer us above-market rates for its content."
"Fubo views Warner Brothers Discovery's refusal to engage in good faith negotiations as another example of its abuse of massive market power that ultimately limits consumer choice," Fubo said.
WBD responded with a statement of its own, telling The Verge, in part: "We have been and remain ready and willing to work diligently with Fubo to reach a fair market agreement. We proposed an extension of our current agreement, with no changes or price increases, that would allow Fubo to continue carrying these networks, and it is unfortunate that Fubo has decided to alienate their own customers in this way.”
As the companies point fingers, though, the people losing out are viewers, who have not heard of any price drop since Fubo announced it's cutting the above-listed channels from the service. A Fubo representative declined to comment on pricing when reached by Ars Technica.
"That is a LOT of channels to be dropping to not have a corresponding price break, or at least be adding some additional content to compensate," a Reddit user named chrispdx said about Fubo's announcement.
A Reddit user going by fenwyk, said:
If they aren't carrying the same channels as was agreed when signed up for the service, and not having to pay for WB channels, than they should offset the cost on customers in decreasing the price of the service.
Fubo is worried
Fubo and WBD have had an increasingly contentious relationship. In February, Fubo filed an antitrust suit against WBD, The Walt Disney Company, (which owns ESPN), and Fox Corporation over the trio’s plans to launch a joint sports streaming app.
AdvertisementThe lawsuit accuses the proposed app of being "anticompetitive" and would create "insurmountable barriers" that limit consumer choice. The suit accuses the companies of forcing Fubo to license dozens of unwanted channels by bundling them with sports content. A Fubo rep declined to comment on how much losing the 19 WBD channels, which largely seem unrelated to sports, affects Fubo's value proposition.
Fubo ended 2023 with more subscribers than ever, 1.1618 million, and a 29 percent year-over-year increase in North American revenue ($402 million total), with ad revenue specifically growing 14 percent throughout 2023. The company's ARPU also rose in North America to $86.65 in Q4 2023, compared to $75.20 in Q4 2022.
However, Fubo wasn’t profitable last year and strives to be so by 2025. Fubo's antitrust suit details why it thinks WBD, Disney, and Fox's planned joint venture threatens its business. In Fubo’s Q4 2023 earnings call, founder and CEO David Gandler claimed Fubo would "may have been able to break even in 2023" if it didn’t spend an “estimated $200 million-plus" on "content consumers don’t want" before turning to discuss the joint venture that he claimed is "an attempt to monopolize the sports streaming industry and eliminate competition."
Fubo will announce its Q1 2024 earnings on May 3.
Subscribing to a headache
We expected 2024 to bring change to streaming services, perhaps even in the former of mergers and acquisitions, but the speed at which they disrupt their prices and services is enough to give us whiplash.
In a seemingly desperate push, many streaming services seem to prioritize revenue and profits ahead of building the best streaming service for customers. Too often streaming services make negative announcements with nothing positive to balance out the bad news.
We could go on about how this might force people to reconsider their subscriptions, but we should publish before another service makes yet another policy change.
