The Internet is free and open. So goes the Putin-style propaganda line. Still, being entertained digitally is becoming costly, and soon enough, it’s going to be even more expensive.
Today, the outrageous $10 popcorn bag at brick–and mortar cinemas is being replaced by a $50-a-month broadband connection, then you’ll need to shell out approximately $50 a month at least for three separate streaming services (e.g., Netflix, HBO Max, and Disney+), $40 a month for mobile voice and data, and about $12 a month for Facebook, $12 for Instagram, $4 for Snapchat, and $3.50 for Twitter (Blue). Linkedin also offers a premium service at $40 a month. Add to these the costs of podcasts, audio feeds, digital editions of magazines, newspapers, and newsletters.
Even after cord-cutting the cost of cable and/or satellite TV, being entertained and excluding sports, is going to be a $1,800 a year expenditure for the average soul, and $2,500 for wanna-be influencers. And this is the minimum one can expect, considering that in the U.S. the median household annual income is $70,000. Under these conditions, competition is going to be fierce, and not all can or will survive.
It is therefore clear that the SVoD sector’s business model is not sustainable now, and will be even less sustainable in the future. And this is a topic that will be analyzed in VideoAge’s May L.A. Screenings edition.
In that issue, VideoAge will compare current streaming services’ business models with the similarly capital-cost intensive telephone and electrical services in their early days.
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