What is streamflation? (And will streaming prices keep rising?)

By Kate Ashford, NerdWallet

If you use streaming services for videos or video games, you might have noticed some higher prices — or “streamflation” — on your credit card bills.

While monthly inflation was only 0.3% in December, the category of “subscription and rental of video and video games” saw prices increase 19.5%, according to the Bureau of Labor Statistics.

This includes streaming services like Netflix, HBO Max, Disney+ and Hulu, which all boosted subscription prices last year. (It does not include live streaming television.)

Why streaming prices are outpacing inflation

The jump in cost is due, in part, to the evolution of the streaming industry, says Paul Erickson, principal media and entertainment analyst for Omdia, a tech research and advisory group.

During the pandemic, Erickson says, streaming companies prioritized subscriber growth above all else. Now that streaming audiences are largely stable, companies are under more pressure to be profitable and sustainable.

“We have this drive for better profitability and business performance, teamed up with the rising cost of content,” Erickson says. “By and large, the cost of content is always upward.”

Among other things, streaming services are competing for sports rights, which help attract and keep subscribers. Sports rights also reduce churn, the rate at which subscribers leave a service. This makes sports valuable — and that value is expensive.

“The business model doesn’t work if you’re paying $8 a month,” says Dan Rayburn, a streaming media expert and consultant.

Currently, ad-supported streaming costs about $8 to $12 per month, while streaming with no ads runs about $13 to $25 per month, depending on the company. Prices vary for bundled services.

Rayburn points to Paramount, which announced last August that it had signed an agreement to distribute all UFC events in the U.S. In November, the company announced that Paramount+ subscription prices were going up.

“It’s billions of dollars they just spent,” Rayburn says. “They need to somehow pay for this.”

Historically, streaming companies have implemented little price bumps over time, to keep increases from feeling painful, Erickson says. “If you don’t want to alienate the consumer, you spread it out,” he says.

Will streamflation continue?

Although the 12 months ending in December 2025 saw a 29% increase in prices across streaming services, Erickson doesn’t think it’s a trend.

“That’s probably not going to be the pattern we can expect,” he says. “We can expect we’ll see incremental price increases from time to time.”

And if prices ever get too high for your taste, you can always downgrade your subscription or cancel it.

“Every single one of these services is month-to-month,” Rayburn says. “There’s no lock-in.”

Kate Ashford, WMS writes for NerdWallet. Email: kashford@nerdwallet.com. Twitter: @kateashford.

The article What Is Streamflation? (And Will Streaming Prices Keep Rising?) originally appeared on NerdWallet.