Thankfully I’m still at a point where I can go à la carte with Netflix, HBO, a Disney/ESPN+ bundle, and Peacock and still pay less than I had been under my previous cable plus select streaming arrangement.
What’s fascinating is how cable and even phone/internet providers are now partnering with streaming platforms and offering them as a bundle with their services. Cable hasn’t recovered, per se, but it is evolving.
Love this piece. Price discrimination is one of those concepts that, once you see it, you start noticing it everywhere, and streaming is a perfect example of how it keeps evolving.
What stood out to me is how naturally this connects to second-degree price discrimination. We have always seen this in retail: bulk discounts, different package sizes, “buy more, pay less per unit.” Consumers reveal their willingness to pay through their choices.
Streaming platforms are doing something very similar, just in a more subtle way. Instead of quantities, it is tiers, ads vs. no ads, number of screens, content access. Different versions of essentially the same service, designed so users self-select.
It is interesting because it feels new, but economically it is the same mechanism we have been teaching for years, just repackaged for the digital world.
Amazon is measuring Quality of Experience metrics... you'll pay more for the perception that you are receiving a much higher quality product. The vertical integration is also unique where they sell the product and the methods by which that product is consumed. (FireTv based tvs are huge data-mining opportunities for them to see what else people watch not on Prime or it's sub-channel distribution.)
As a Comcast sufferer, I do find it amusing that I can watch Duke games in 4k without the commericals via their native cable system while those watching the same 1080p stream are beaten down by them.
*Having recently purchased a new 4K television, even the upgrade in tech over the previous 4k tv was huge. (We'll not explore my overkill sound-system.)
Thankfully I’m still at a point where I can go à la carte with Netflix, HBO, a Disney/ESPN+ bundle, and Peacock and still pay less than I had been under my previous cable plus select streaming arrangement.
What’s fascinating is how cable and even phone/internet providers are now partnering with streaming platforms and offering them as a bundle with their services. Cable hasn’t recovered, per se, but it is evolving.
The worst part is we saw this coming for years!
Love this piece. Price discrimination is one of those concepts that, once you see it, you start noticing it everywhere, and streaming is a perfect example of how it keeps evolving.
What stood out to me is how naturally this connects to second-degree price discrimination. We have always seen this in retail: bulk discounts, different package sizes, “buy more, pay less per unit.” Consumers reveal their willingness to pay through their choices.
Streaming platforms are doing something very similar, just in a more subtle way. Instead of quantities, it is tiers, ads vs. no ads, number of screens, content access. Different versions of essentially the same service, designed so users self-select.
It is interesting because it feels new, but economically it is the same mechanism we have been teaching for years, just repackaged for the digital world.
Amazon is measuring Quality of Experience metrics... you'll pay more for the perception that you are receiving a much higher quality product. The vertical integration is also unique where they sell the product and the methods by which that product is consumed. (FireTv based tvs are huge data-mining opportunities for them to see what else people watch not on Prime or it's sub-channel distribution.)
As a Comcast sufferer, I do find it amusing that I can watch Duke games in 4k without the commericals via their native cable system while those watching the same 1080p stream are beaten down by them.
*Having recently purchased a new 4K television, even the upgrade in tech over the previous 4k tv was huge. (We'll not explore my overkill sound-system.)
We always say history repeats itself... right? Incoming price hikes across streaming platforms.