Is cord-cutting losing its appeal as streaming becomes more expensive than cable?

In brief: Like everything else in these economically challenging times, streaming is becoming more expensive. With so many companies raising their prices, subscribing to the premium services will cost $87 this fall, while the average cable TV package costs $83 per month. It begs the question: is the era of cheap streaming services and cord-cutting over?

Disney announced last week that it will be introducing price increases across all of its ad-free services and packages, including a 27% hike for Disney+ and a 20% jump for Hulu. It marks the second time in 12 months that Disney has confirmed price rises. It also means that the service now costs double the $6.99 it started with in 2019.

The Financial Times writes that as of fall, the $87 per month price to subscribe to the top US streaming services is $14 more than it was one year earlier ($73).

Back in 2020 when the streaming industry was one of those areas being boosted by the pandemic, it was estimated that 31.2 million households would "cut the cord" by the end of the year, and that by the end of 2024, fewer than half of US households will subscribe to a traditional pay TV service. But that may no longer be the case.

One of the main factors prompting cord-cutters was the high prices, especially when compared to the then-much-cheaper streaming options. But the FT notes that the average cable TV package is now $4 cheaper than subscribing to all the premium streamers. It's led to the publication's declaration that the era of cheap streaming is now over.

Another reason people used to cut the cord in favor of streaming was commercials. But companies such as Netflix and Disney now offer ad-supported tiers for lower prices. Disney's version has 3.3 million subscribers, and about 40% of its new subs opt for this plan.

Password sharing, once a big benefit of streaming, is also being killed off. Netflix already charges those who share their login credentials extra, while Disney said it will be doing the same, likely starting next year.

One thing that streaming still has over traditional TV is that customers can pick and choose which services they prefer and easily pause their subscriptions – many people cancel and then resubscribe when flagship shows like Stranger Things or The Mandalorian return.

It'll be interesting to see if customers start abandoning streaming services as prices continue to rise. Disney CEO Bob Iger claimed the number of people who canceled their subs last time prices went up was insignificant, but Disney could lose a lot more people once its plans become more expensive on October 12.