The Most Overrated Streaming Service Is Raising Its Prices
Peacock subscribers will soon be paying more for the privilege to stream Shrek whenever they want. The Hollywood Reporter recently revealed that NBCUniversal intends to raise the cost of its Premium subscription option from $4.99 to $5.99, while Premium Plus will see a slightly steeper hike from $9.99 to $11.99. These price increases are set to go into effect starting August 17.
These streaming price hikes have been coming more regularly as an ad-free, subscriber-based business model proves to be less profitable than the studios had hoped. Peacock competitor Disney+ was recently forced to raise the price of its ad-free plan in order to make up for the loss of 2.4 million subscribers during the first quarter of 2023.
Beginning on August 17, Peacock subscriptions will increase by $1 or $2, depending on the tier.
Surprisingly, the Peacock price increase comes after the streamer reached a record 22 million subscribers in the same quarter, up 60 percent over last year’s numbers.
Execs at NBCUniversal claim that despite all the new subscribers, Peacock has to raise its prices in order to continue investing in “The best user experience and the highest-quality content while remaining competitive in the marketplace.”
That’s a nice way of saying that even with the subscriber boost, Peacock is expected to lose close to $3 billion for NBCUniversal in 2023. In an industry that becomes more profit-driven by the day, Peacock is feeling the pressure from its parent company to make up those losses any way possible.
More Streamers Hike Prices
Meanwhile, competitor Paramount+ with Showtime recently raised the monthly subscription for their ad-free premium plan from $9.99 to $11.99 following similar price increases from fellow streamers, Netflix, Apple TV+, Amazon Prime, and the above-mentioned Disney+.
This wave of sudden price hikes indicates that Peacock and all the other streamers are no longer willing to price their plans intentionally low to attract new subscribers.
Peacock’s decision to raise the price of its subscriptions comes amidst a time of great turmoil in Hollywood. With both the writer’s guild and the actor’s guild on strike, not to mention platforms like Max purging so much existing content, streamers could face a content drought not too far down the road.
In the event that the strikes continue through the summer into the fall, will Peacock and its competitors be able to justify charging more for less new content?
Execs at NBCUniversal claim that despite all the new subscribers, Peacock has to raise its prices in order to continue investing in “The best user experience and the highest-quality content while remaining competitive in the marketplace.”
Despite Peacock’s projected loss of $3 billion this year, the company seems to be thriving financially. NBCUniversal’s revenue in 2021 reached pre-pandemic levels and in 2022 surpassed them with a whopping $39 billion.
Given that the WGA’s demands would cost the company $34 million a year—a fraction of even $1 billion, let alone 39 of them—it might make more sense for NBCUniversal to give in sooner rather than later before they follow Disney and start hemorrhaging subscribers.
On the other hand, Peacock has added over 80,000 hours of content since its launch, including offerings from Universal, NBC, Bravo, Hallmark, and even news channels CNBC and MSNBC. It may, in reality, be quite a long time before subscribers run out of content to watch on Peacock.
NBCUniversal will have to wait until August 17 to see if their new pricing plan will drive subscribers away or not.
