Frank Pallotta predicts on CNN Business that Streaming is about to get a lot more expensive.

Last week Disney+ revealed it has amassed 86 million subscribers and “will have roughly 10 new series from Marvel and Star Wars, as well as 15 Disney live action, Disney Animation and Pixar series. Disney also said that 15 new films from Pixar, Disney live action and Disney Animation will be heading to the service.”

Oh, and the price is going up in March 2021. This, after Netflix has already raised prices for US subscribers in October 2020.

Frank argues that streaming subscriptions must go up to pay for the expensive movies that will find their audiences at home in 2021 and not in cinemas:

“Take HBO Max, for example. The service from CNN’s parent company WarnerMedia announced earlier this month that it will stream movies on HBO Max the same day they drop in theaters. Whether that becomes the norm or is just a quick solution during a pandemic is yet to be seen. But if it becomes a permanent strategy, consumers will likely see their subscription prices rise over the next few years. Producing a major blockbuster like ‘Wonder Woman 1984’ isn’t cheap.”

He also quotes Bernie McTernan, a senior analyst at Rosenblatt Securities:

“Disney increasing its content budget is a big deal for the whole industry, including Netflix. It is effectively raising the bar to compete. If Disney needs to spend $14 billion to $16 billion on content, then Netflix likely needs to spend well over $20 billion to achieve the same subscriber scale globally.”

Investors will foot this with the expectation of future company profits. But given that the rate of new subscriptions is plateauing, Netflix will have no choice other than raising prices again. (They have also cancelled their free month trial subscription.)

My take: and don’t forget that in Canada GST will become payable on your foreign streaming services come mid-year. Yes, streaming will definitely cost more in 2021.