Apple announced on March 13th that their streaming service Apple TV+ will increase from $6.99 per month to $9.99, following other companies such as Netflix, Disney and HBOMax in raising their prices accordingly. Apple originally introduced its service at $4.99 per month making it one of the more economical offerings among competitors.
Apples to Oranges
Apple entered the streaming industry in November 2019 in order to compete against century-old media conglomerates with extensive movie and show libraries. To differentiate itself from these services, it offered its service at an economical price point and received positive reviews for its original programming despite ranking third behind Amazon and Netflix according to Parrot Analytics report. Meanwhile, sources report that Apple may be losing billions through Apple TV+ as it doesn’t disclose financials for it.
In line with the rest of the industry, Apple is now raising its prices in an effort to increase revenue:
- Netflix recently raised the prices of its ad-free plans to $11.99 per month for the basic plan and $22.99 per month for the premium plan.
- Disney increased the monthly prices of its ad-free plans for Disney+ and Hulu to $14 and $18, respectively.
- HBOMax, Paramount Plus, and Peacock have also raised their prices earlier this summer.
Apple is raising prices of other subscription services as well, including Apple Arcade at $6.99 per month and News Plus at $12.99 monthly, both reflecting Apple Services revenue growth: their Services division generated $21.2 billion last year alone and was the company’s most profitable division.
Apple’s decision to raise prices signals the streaming industry’s trend toward increasing costs. While this may lead to greater revenue for industry giants like Netflix and Hulu, price-sensitive customers may feel they’ve been affected adversely. As streaming landscape continues to evolve it will be fascinating to witness customer responses and how it impacts subscription decisions.