Investors started 2022 with a healthy amount of enthusiasm for Warner Bros. Discovery (WBD 0.61%). The company began the year with its stock trading at approximately $30, a figure it had been hovering around for several months. And while the shares were far below their 2021 high-water mark of roughly $77, the fall was in line with the declining prices of other streaming stocks that were feeling the effects of a receding pandemic.

This year, Walt Disney (NYSE: DIS) has fallen roughly 35%, while Netflix (NASDAQ: NFLX) is down about 52%. Warner Bros. Discovery's shares are down 48% since the beginning of 2022. Here's why the company has had a tough time with its streaming competition.

Fresh competition in the ad-supported space

Both Walt Disney and Netflix announced earlier this year that they would introduce new entry-level ad-supported plans in a push to grow their respective subscriber numbers. Walt Disney's $7.99-a-month Disney+ Basic (with Ads) will go live on Dec. 8, while Neftflix's similarly named Basic with Ads, priced at $6.99 a month, launches Nov. 3.

Warner Bros.' HBO Max has had an ad-supported tier since the summer of 2021. But with a price of $9.99 a month, it's already more expensive than upcoming offerings from Walt Disney and Netflix. And while Warner Bros. could respond by reducing the price of its ad-supported plan, that doesn't seem to be in the cards.

The potential of future price increases

Warner Bros. Discovery chief financial officer Gunnar Wiedenfels has suggested the company's streaming services are "​​fundamentally underpriced." Wiedenfels made the comments during an appearance at the Goldman Sachs Communacopia + Tech Conference in September, where he discussed Warner Bros.' plans to merge HBO Max and Discovery+ into a single platform next year.

Wiedenfels did not disclose a price for the unified offering, but his words have led to speculation the yet-to-be-named service will be more expensive than the combined cost of HBO Max (currently $14.99 a month without ads) and Discovery+ ($6.99 a month ad-free).

Walt Disney and Netflix have also adjusted their streaming pricing this year: Disney-controlled Hulu recently increased from $6.99 to $7.99 a month, ESPN+ went from $6.99 to $9.99, and ad-free Disney+ is going from $7.99 to $10.99 a month when Basic (with Ads) arrives. Netflix raised the cost of all its plans by $1 to $2 a month in January.

For market watchers, the cost increases from Walt Disney and Netflix have been priced into their stock prices. But with questions around how Warner Bros. Discovery will price its merged streaming service year, and how consumers might respond, uncertainty still weighs on WBD stock.

Warner Bros. Discovery watches costs while others spend big

Walt Disney has committed $32 billion to new content this year, while Netflix has earmarked $17 billion. Warner Bros. hasn't disclosed what it will invest in content in 2022, but CEO David Zaslav has been clear about the company's mission. "We will not overspend to drive subscriber growth," Zaslav said, suggesting it is better for Warner Bros. to rely more on its existing properties.

There is certainly logic to the argument that Warner Bros. should leverage its back catalog. The company is home to iconic DC superheroes like Superman and Batman, revered HBO TV shows such as The Wire and The Sopranos, and Discovery stalwarts Deadliest Catch and Naked and Afraid. But leaning too heavily on old episodes and classic movies could soon appear stale to consumers, especially when Disney+ and Netflix are rolling out shiny new content at a rapid clip.

There is perhaps a silver lining to Zaslav's approach. The company has been on a cost-cutting mission all year as it seeks to find $3 billion worth of savings. This has manifested itself in several ways, including waves of layoffs, the high-profile shutdown of HBO Max movie Batgirl, and the sudden closure of CNN+. Through this lens, Warner Bros.' fiscal responsibility should surely be rewarded by a more-robust stock price. But it hasn't been.

For investors watching the stock, there is still much to play out. Walt Disney and Netflix are yet to launch their ad-supported tiers, and HBO Max and Discovery+ are not yet a merged offering. Once these things have occurred, it's possible Warner Bros. Discovery might present more value to stakeholders, but as things stand, there are too many unknowns about the company and its long-term market prospects for some investors to take a gamble.