Inflation might be cooling down, but “Streamflation” is real, per new data from the U.S. government.
The Bureau of Labor Statistics on Tuesday released its December Consumer Price Index, showing modest inflation of 0.3 percent on a monthly basis and 2.7 percent for the year.
But a deeper dive into the data tables also shows an outlier that is relevant to Hollywood: Subscription video services.
According to the BLS data, “Subscription and rental of video and video games” saw inflation of 19.5 percent in December. That is a category that includes subscription streaming services like Netflix, HBO Max, and Disney+.
For comparison, “Cable, satellite, and live streaming television service” (which would include YouTube TV, Fubo, and Sling TV) rose 1.1 percent while “Recorded music and music subscriptions” (Spotify, Apple Music) also rose by just 1.1 percent.
The streaming surge was a true outlier in the data, with no other category cracking double digits, and many categories (including “cookies,” “bananas” and “laundry equipment”) seeing deflation in the month.
There are likely a number of factors driving the surge: Some of the biggest streaming platforms, including Disney+, Hulu and HBO Max, all launched price increases late last year. Peacock and Netflix both raised prices earlier in the year.
In addition, ESPN and Fox launched their pricey new standalone streaming platforms, which may not be considered part of the cable and satellite category.
And the timing coincides with football season. With many NFL and college football games shifting to streaming platforms, even if they remain on broadcast in local markets. NBC also debuted its NBA games on Peacock.
The end result is that prices for streaming video continue to rise, and consumers are forced to spend more to access to live sports that are increasingly spread across more streaming platforms.
While the 19.5 percent bump is likely temporary (though Paramount+ will raise prices this month, and Netflix could always adjust its pricing), but it underscores a growing problem for the industry, and rising churn could become an end result. That said, multiple companies are exploring more creative bundles with a goal of reducing churn and offering better value. Whether those deals offset the rising prices is a whole other story.
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