Consumers spend $22 more per month for streaming services. Why are prices rising?

Six years ago, when San Jose writer Katie Carridan joined Disney+, it cost $6.99 a month, giving her family access to hundreds of movies like “The Lion King” and thousands of TV episodes, including the Star Wars series “The Mandalorian,” without any ads.

But since then, the price of the ad-free streaming plan has gone up to $18.99 per month. It was the last straw for Carriden, 42, whose husband canceled Disney+ last month.

“It’s getting to the point every year that it’s going up, and in this economy, every dollar counts, and so we really have to sit down and take a hard look at how much we’re paying for streaming services,” Carriden said. “What is the return on enjoyment we get as a family from streaming services? And how do we factor that into the budget to make sure all our bills are paid at the end of the month?”

It’s a conversation that many people who subscribe to streaming services are in the midst of an uncertain economy.

Once sold at discounted prices, many platforms have hiked prices at a clip leaving customers disappointed. Entertainment companies, under pressure from investors to bolster profits, are raising the cost of their plans to help pay for the premium content they provide. But some viewers aren’t buying it.

Consumers are paying $22 more for subscription video streaming services than a year ago, according to consulting firm Deloitte. As of October, U.S. households spent an average of $70 a month, compared with $48 a year earlier, Deloitte said.

About 70% of consumers surveyed last month said they were unhappy with entertainment services they subscribe to raising prices, and about a third said they had cut back on subscriptions in the past three months because of financial concerns, according to Deloitte.

“There’s a frustration, just in terms of both apathy, but also from a perspective that they don’t think it’s worth the cost of a monthly subscription just because of boredom,” said Rohit Nandagiri, managing director of Deloitte Consulting LLP.

Disney+ has raised the prices of its streaming service almost every year since launching in 2019 at $6.99 per month. The company dropped prices for ad-free plans to $1 in 2021, followed by $3 increases in 2022 and 2023, a $2 price increase in 2024 and, most recently, a $3 increase this year to $18.99 a month.

A Disney+ spokesperson did not respond to a request for comment on the latest price increase.

“The goal first was to get scale as quickly as we could, and we did that,” Walt Disney Co. Chief Financial Officer Hugh Johnston said at a Wells Fargo meeting in Rancho Palos Verdes on Wednesday. Johnston was referring to Disney Direct’s consumer segment, which includes Disney+.

“We produced a lot of content and, on top of that, priced it very aggressively and we got scale,” he said.

Disney isn’t the only streamer to raise prices. Other companies, including Netflix, HBO Max and Apple TV, have also raised the prices of many of their subscription plans this year.

Some analysts say streamers are charging more because many services add live sports, the rights to which can cost millions of dollars. For years streaming services have also given consumers access to big-budget TV shows and original movies, and as production costs rise, they expect viewers to pay more as well.

But some customers like Keridan have a different view. As much as some streaming platforms add new content like live sports, they also choose not to renew some big-budget shows like “Star Wars: Acolyte.” Carridan, a Marvel and Star Wars fan, said she mainly watched Disney+ for movies like “Captain America: The Winter Soldier” and shows like “The Mandalorian.” Now he’s going back to watching some ad-free shows on Blu-Ray discs.

While Carreyden is cutting Disney+, her family still subscribes to YouTube Premium and Paramount+. She said she uses YouTube Premium for workout videos instead of paying for a gym membership. Her family enjoys watching Star Trek programs on Paramount+, such as “Star Trek: Brave New World,” season three.

Other consumers choose to keep their streaming subscriptions but are looking for cost savings through cheaper plans with ads, or bundled services. For example, an ad-free subscription to Netflix starts at $17.99 per month but the plan with ads is $10 cheaper at $7.99.

According to media consulting firm Magid, US consumers subscribe to an average of about five streaming services. That number hasn’t really changed since 2023, when the average consumer subscribed to four streaming services, the company said.

“Television is one of the cheapest forms of entertainment,” said CEO and President Brent Magid. “So when times are tough, consumers will switch from more expensive entertainment to more affordable entertainment. That’s television.”

“Consumers today are more willing than ever to resist advertising and to get content for a lower subscription price,” said Brent Magid, president and CEO of Minneapolis-based media consulting firm Magid. “We’ve seen that number go up as people’s budgets get tighter.”

Some streamers also offer bundles, similar to the old guard of home entertainment, a cable package. But some consumers are starting to get tired of subscribing to multiple streaming platforms just to get all their favorite shows and sports. That has driven some people back into the pay-TV arms, said Jennifer Kent, vice president of research at Parks Associates.

“Part of it is content,” Kent said. “They want to make sure they have access to live news and live sports. But the other part is that it’s a great deal to get as much content as I can when I bundle it with home Internet, or I bundle other services together.”

Carridon said he’s already cutting back on other expenses in the family in addition to ditching Disney+. The money her family spends on food is increasing, and to save money, they have cut back on trips for the year. Normally, Keridan says, they go on two or three vacations a year, but this year they will only go to Disneyland in Anaheim.

But even the happiest place on earth hasn’t escaped rising prices.

“As streaming fees have gone up, park fees have gone up,” Carridan said. “And it seems like the price of everything is going up these days, and they’re competing directly with each other now. We can’t keep it all, so we have to cut back.”