Streaming services are rapidly taking over the multimedia business, cutting traditional cable television out of the game they created.
Subscription-based streaming services like Netflix (NFLX), Hulu (HULU) and Disney+ (DIS) have risen in popularity due to their wide range of show and movie offerings that can be easily binge-watched anytime, anyplace. The addition of live TV made joining these streaming services even more enticing, allowing subscribers the convenience of obtaining massive amounts of content in one place.
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Because these streaming services are so convenient, more people are opting to pay for memberships rather than spending additional money on traditional cable television services, which usually tend to have a higher price point than these modern-day streaming providers.
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The alternative services have been more affordable than cable television for years, partly because you can subscribe to one at time, but recently, they've grown in popularity. The result? A rise in prices despite the increase in competition.
In the span of less than three years, Netflix has increased its prices several times, with its last surge being in January 2022. Disney+ raised prices for its ad-free tiers last year, and Hulu's went up in 2024.
YouTube TV announces a price increase starting next year
On Thursday, YouTube announced it would increase the price of its base plan for YouTube TV by $10 a month to $82.99 monthly, starting Jan. 13, 2025.
The purchase of one YouTube TV base membership allows for a maximum of six total household accounts. The subscription includes national and local networks, a collection of on-demand movies and shows, unlimited cloud DVR storage space, and free equipment rentals and installation appointments. If that's not enough content, members may add premium add-ons to the package for additional charges, including streaming platforms like HBO Max, SHOWTIME, and STARZ.
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According to YouTube, the decision to raise its prices was an effort "to keep up with the rising cost of content and the investments we make in the quality of our service," as stated in an email sent to membership holders.
YouTube also added that the shocking announcement was not made lightly. It's aware of the impact it may have on its members and understands that the big increase might lead some customers to cancel their subscriptions.
YouTube TV has continued to raise its prices while gaining subscribers
This is not the first time YouTube TV has raised its prices. The company has increased its cost yearly, with the last increase occurring in March 2023, when it increased from $64.99 to $72.99.
Despite the constant price surges, YouTube TV's membership numbers have yet to be negatively impacted.
YouTube TV reported over 8 million subscribers at the beginning of this year, a huge jump from the 6.3 million it reported at the beginning of 2023. Although popular, it still didn't surpass traditional television distributors like Comcast, Charter and DirectTV.
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However, the idea of YouTube TV becoming the largest pay-TV distributor is not so farfetched. Traditional cable TV providers have reported constant membership declines, in contrast to YouTube TV, which continues to report positive gains.
Last month, Moffett Nathanson forecasted that YouTube TV's subscriber numbers would increase by 1.5 million yearly, reaching a total of approximately 12.4 million by the end of 2026. If YouTube TV meets these expectations, it could become the top pay-TV distributor.
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