The streaming TV market is changing rapidly.
It went from being a money-saving haven for cord cutters a few years ago to being a big business for major companies wanting a piece of the financial pie in 2023.
Money expert Clark Howard often says we’ve been living in the “golden era” of streaming TV. There’s more high-quality content available now than ever before.
But many streaming services have consistently upped the subscription prices along the way to keep up with increasing production and content acquisition costs.
And while consumers do have more content choices than ever, not all of it is being heavily consumed. As a result, not all the content being created is producing profits.
These factors could mean those golden days may soon be gone and some turbulent times could be ahead.
3 Streaming TV Predictions from Clark Howard
During a recent discussion with Clark, I asked him what consumers should do about increasing prices and changing options in the space.
He gave me some thoughts on the future of the industry and how consumers may react to those changes. He also told me what he’s doing with streaming subscriptions in his own life.
1. Consumers May Soon Say “Enough is Enough” To Live TV Streaming
When YouTube TV debuted in 2017, it offered consumers a great value. It had many popular channels, unlimited DVR and phone portability for just $35 per month. Four years later, the price for that service had nearly doubled to $65 per month.
DIRECTV STREAM just announced a price hike that will make the cost of its cheapest package $75 per month. And you’ll need to fork over $100 per month to enjoy the package that includes regional sports networks.
Those are just two examples of how consumers are facing increased costs for live TV streaming at seemingly every turn.
Service providers say the rising costs of broadcast rights deals for popular channels is to blame, but Clark says they may be approaching a price point at which consumers start pushing back by hitting the “cancel” button on their subscriptions.
“The danger for live TV streaming services is that people say ‘I get enough content watching the video on demand streaming services I pay for and I don’t want to do this anymore’,” Clark says. “They need to be very careful with their price points.”
With products like Peacock and Paramount+ attempting to blend live news, sports and local channels with their expansive on-demand content libraries for as little as $5 per month, some streamers may opt for video streaming services instead of live TV.
2. Consolidation of the Market Is Probably Coming Soon
Aside from customer resistance to price increases and costly broadcasting rights agreements, live TV streaming services are also finding that competition within their marketplace is putting pressure on the bottom line.
The fight to keep subscribers in a model built on the freedom to cancel at any time could soon leave some of these services without a path to long-term profitability.
“Some of these companies just can’t seem to make any money, so we’re going to have a great reduction in the number of them,” Clark says. “They talk about ‘the threes’ in capitalism. And what that means is in order for a particular phase of industry to be ultra efficient, it has to get down to three main players. I don’t think the streaming industry will quite get down to three live broadcasting competitors. I think we’ll see a couple more than that, but it’s definitely going to move toward three.”
While Clark made no grand predictions on which live TV streaming services are best positioned to survive, it’s probably worth noting which of them have significant parent companies for clues on long-term viability.
For example, YouTube TV is owned by Google and Disney has a controlling stake in Hulu + Live TV.
3. Bundling and à la carte Purchases May Be the Future
So how can streaming services keep from pricing themselves out of the market while also finding profitability?
Clark says the future of the industry may include more customization of the channels that you’re paying for each month.
“Stripped down channel bundles is where live TV streaming services are going to have to look,” Clark says. “You’re going to have to let people choose the channels they want to some extent.”
He mentioned to me that he likes the direction that Sling and Philo have taken in targeting segments of the live TV marketplace.
Philo, for example, does not include any sports, news or local channels with its service. That’s how it’s able to limit its subscription price to $25 per month.
Clark says that doesn’t work for him particularly because he’s most interested in sports streaming content, but it’s a perfect fit for someone who enjoys entertainment channels and movies but doesn’t want to pay for one of the $65-$75 services.
Sling, meanwhile, gives customers a choice between an Orange and Blue package that has different channel mixes. You can also choose to get both packages (Orange + Blue) at a discount. From there, you can make targeted “add on” selections for your package to get more of the type of content you like.
Clark’s take on where the streaming industry may be heading could help you better prepare for the decisions you may have to make for your entertainment budget in the coming months.
There is no “perfect” answer to which streaming service is best because so much of it has to do with the individual channels and programming that mean the most to your household.
Team Clark has a live TV streaming channel tool that is designed to help you find the most cost-effective way to find the channels that you watch most often.
Do you agree with Clark’s take on the streaming industry? Have some predictions of your own? We’d love to hear about it in the Clark.com community.