Why prices keep going up for streaming services

More consumers look to save some money by bundling packages or watching with ads.

- By WENDy LEE AND STEPHEN BATTAGLIO

PRICE is $18.49 monthly.

(HBO Max)

Last week, HBO Max announced it had raised its standard subscription by $1.50 to $18.49 a month — up 23% from when the streaming service launched five years ago amid the pandemic.

Such announcements have become almost routine in the television business as inflation hits streaming platforms that are under growing pressure to turn a profit and pay for higher programming costs.

Once seen as a cheaper alternative to cable, the cost of a streaming subscription for the top platforms continues to rise, much like higher prices for groceries, gasoline and housing.

In fact, the average price for subscriptions to the top 10 paid subscription streaming services in the U.S. increased 12% this year, following double-digit percentage increases per year since 2022, according to Victoria, British Columbia-based Convergence Research Group.

The research firm included streamers such as Netflix, Disney+, Hulu, Peacock, Apple TV and others in its data set. It factors subscriptions that are with ads or ad-free and does not take into account bundling. All of the major streaming services in the U.S. raised their prices on plans this year, except for Paramount+ and Amazon Prime Video, which boosted rates last year and in 2022, respectively.

The price hikes reflect the tough economic realities of media companies that need to replace dwindling revenue from legacy pay TV channels that have seen declines in viewership.

“The rest of their businesses have effectively been under attack by streaming and so they need this area to be profitable in order to compensate for the decline in their own businesses,” said Brahm Eiley, president of the Convergence Research Group. “It’s been tremendous pressure on them.”

Streaming services have been running as loss leaders for some time, said Tim Hanlon, chief executive of Vertere Group LLC, a media consulting firm.