Extremely Innovative: HBO Raises Streaming Prices For The Third Time In Three Years
from the enshittification-ahoy dept
Now that streaming subscriber growth has slowed, we’ve noted repeatedly how the streaming TV sector is falling into all of the bad habits that ultimately doomed traditional cable TV.
That has involved chasing pointless “growth for growth’s sake” megamergers, imposing bottomless price hikes and new annoying restrictions, undermining labor, and cutting corners on product quality in a bid to give Wall Street that sweet, impossible, unlimited, quarterly growth it demands.
Last week Warner Brothers announced it was up for sale; ushering forth yet another acquisition or merger after literally two decades of terrible, harmful mergers (AOL, AT&T, Time Warner, Discovery) resulting in endless price hikes, layoffs, and dysfunction. And if as on cue, the company announced they’d be once again hiking prices on their HBO (Max Extreme Plus) streaming video service:
“HBO Max’s ad plan is going from $10 per month to $11/month. The ad-free plan is going from $17/month to $18.49/month. And the premium ad-free plan (which adds 4K support, Dolby Atmos, and the ability to download more content) is increasing from $21 to $23.
Meanwhile, prices for HBO Max’s annual plans are increasing from $100 to $110 with ads, $170 to $185 without ads, and $210 to $230 for the premium tier.”
The move comes after Warner Bros CEO David Zaslav spent much of last month whining about how the company’s streaming service was “way underpriced.” Despite the fact the company has raised prices every year for the past three years. Zaslav himself has been endlessly criticized for his soaring compensation package that’s never been commensurate with any sort of actual leadership skill.
Again: these are executives all out of original ideas, boxed in by Wall Street’s demand for impossible, endless growth. They can’t deliver consumers and labor what they want (better pay, better product, lower prices, better customer service), so execs have to resort to financial trickery, price hikes, and megamergers to goose stock valuations and provide significant tax relief.
They’re not building or improving anything, they’re just engaged in an elaborate shell game where they shuffle things around and pretend they’re savvy deal makers.
If you’re not familiar with what happens next: Warner Brothers is sold (probably to Larry Ellison and Paramount/CBS, which is already laying off people from its latest merger). The massive debt load triggers even more layoffs and additional price hikes, the quality of the overall product continues to deteriorate, and annoyed customers flee to fee alternatives, including piracy.
At that point the executives responsible blame everything but themselves (generational entitlement! VPNs!) until companies are finally forced to face evolutionary disruption by more convenient, cheaper alternatives, at which point the execs responsible have taken their bag and failed upward to other companies. And the cycle repeats itself all over again.
Filed Under: consolidation, david zaslav, journalism, media, mergers, streaming, video
Companies: hbo, warner bros. discovery
Comments on “Extremely Innovative: HBO Raises Streaming Prices For The Third Time In Three Years”
To be entirely fair to them, those increases track with inflation just fine. They aren’t innovating or improving anything, but the dollars don’t go as far as they used to.
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The price increases are running at about 8%-10% which is about 3 times the current inflation rate of about 3%. So slightly above the track of inflation.
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Inflation rates would not be measured in percent, but in percent over some time period. Your numbers are useless without that period.
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A factor of 3 is more than slightly above. Especially when it’s the third time in as many years.
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I don’t see why that’s a concern. As much as some people like to mention “innovation”, the subscribers just want to see and hear acting (and sometimes sports). Not all that different from Shakespeare’s day, really, except in the details.
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Are you lying, or just bad at math?
…You know, I could respond to a lot of your posts with that question.
There is another price increase that you didn't mention
In addition to those price increases, HBO also charges $7.99 for account sharing and blocks credential sharing.
Inflation rate is usually year over year so 3% is current rate for the last year. HBO is doing 8-10% since they last raised prices last year.
Just keep cranking it up!
Conventional wisdom would say that prices increases should continue until they lose about 15% of their current subscribers.
Supposedly, they have 110 million global subscribers, so they just need to crank prices up until they only have ~93 million subscribers.
Should be pretty easy, no? Just raise the price by 25% every quarter!
Hey that’s not fair. It takes a lot of innovation to be able to constantly exploit people, make them happy about it, and tank a company’s long term profits without investors realizing it is happening.
The CEOs need to be innovative for just long enough to be able to jump ship with their money before people realize what is happening.
I think Disney+ still holds the record with 3 times in 2 years, with the last one nearly doubling the price (and I’m sure it’s been increased even more since then [but I wouldn’t know since I cancelled and haven’t been paying any attention to them]).
Monkey's Paw
Warner Bros. has to be the monkey’s paw of media.
For more than 25 years, Warner has tanked the fortunes of anyone who dared acquire it. It’s an old name as has showbiz pedigree, so it looks prestigious as an acquisition in financial statements and the synergy potential is seductive.
Every acquisition of Warner granted the firm its wish, but then fate twisted. AOL was overvalued and ruined, and became a faded relic of ’90s tech. AT&T went in way over its head by becoming a media player (also acquiring DirecTV when people have been shedding pay-TV subscriptions). WBD enshittified every cable channel under its umbrella.