You're going to have to dig a little deeper to keep up with Ted Lasso, Severance, and Slow Horses. Apple (AAPL -1.36%) announced on Friday that it's raising prices for its Apple TV+ streaming service.
Paying $14.99 a month for the popular on-demand streaming service may not seem like a lot. You're shelling out $0.50 a day for an expanding platform of content escapism. However, the problematic take is how quickly the streaming platform's monthly rate has crept higher since it launched almost seven years ago.
- November 2019: $4.99 a month
- October 2022: $6.99
- October 2023: $9.99
- August 2025: $12.99
- August 2026: $14.99
Image source: Getty Images.
Living up to the "+" in its name
When Apple launched in the fall of 2019, it was easy to see why it chose an aggressive $4.99-per-month price point. Despite being a company known for charging a premium over the competition, it was starting its content catalog from scratch. It couldn't match the vault that global market leader Netflix (NFLX -0.32%) and other streaming service stocks were offering, even if the top dog had boosted its monthly rate from $10.99 to $12.99 earlier that year.
Disney's (DIS -0.51%) own namesake premium streaming service, Disney+, would launch a few days after Apple's platform. Despite having decades of content and some of the most iconic intellectual properties, the House of Mouse also rolled out its ad-free offering aggressively. Disney+ came out at $6.99 a month, giving theme park passholders, Disney credit card holders, and D23 fan club members the ability to lock in to multiyear prepaid pricing as low as $4.99 a month.
Other Big 6 media giants jumping into the game in 2020 and beyond with fuller content slates than Apple TV+ would also price their new services in the single digits. Comcast's (CMCSA -1.18%) Peacock Premium Plus and Paramount Skydance's (PSKY +0.60%) Paramount+ rebrand of CBS All Access set their initial monthly prices at $9.99.
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Key Data Points
It adds up over time
When cord-cutting started to gain momentum several years ago, the appeal of replacing costly satellite and cable TV services with a handful of affordable digital on-demand apps sounded great. Every increase -- and Paramount+ raised its prices just 10 days before Apple's increase -- adds up. Here is what ad-free premium services cost per month in the summer of 2020:
- Netflix: $12.99
- Disney's Hulu Premium: $11.99
- HBO Max: $14.99
- CBS All Access/Paramount+ Premium: $9.99
- Disney+ Premium: $4.99
- Peacock Premium Plus: $9.99
- Apple TV+: $4.99
- TOTAL: $69.93 a month
Now let's price out these seven services today:
- Netflix: $19.99
- Hulu Premium: $18.99
- HBO Max: $18.49
- Paramount+ Premium: $13.99
- Disney+ Premium: $18.99
- Peacock Premium Plus: $19.99
- Apple TV+: 14.99
- TOTAL: $125.43
Before digging into the jaw-dropping inflation, I want to point out a few things. Many of these services are owned by companies that have stopped reporting or rarely offer domestic or global subscriber counts. They are listed in order of industry estimates for stateside paid subscribers on FlixPatrol.
I left out Disney's ESPN because it's a sports-centric service. I also cut out Amazon's (AMZN -2.97%) Prime Video since it's part of a broader shopper loyalty subscription. With those two, Apple TV+ would be the ninth largest premium video streaming service in the country. Does that seem like a service that should have tripled its price over the last four years? Even the mighty Apple stock has only doubled in that time.
Will Apple TV+ survive the inevitable shakeout?
If you replaced your old cable TV plan with seven of the country's most popular streaming services four summers ago, $69.93 a month seemed reasonable. Today, you would be shelling out $125.43 a month, a 79% increase in five years.
The biggest shock is that it's not the most popular services taking advantage of the situation to jack up their monthly ransoms. They are up 23% to 58% over the past five years. Amazon's Prime subscription service has risen a modest 15% in that time. It's the smaller services like Apple TV+ that have roughly tripled in that time. How will that help them catch up in a game where strong attraction and retention result in scalability?
The value proposition is fading at Apple TV+, if not gone entirely. The next time the economy hits a speed bump, the smaller services that pushed out the highest increases will get pushed out of family budgets. Greed storms in with bragging rights but often ends in humbling exits.
