Is There a Price War Looming for Over-the-Top Content? Part 1

Proponents of the free market purport that supply and demand set prices that are fairest for the consumers. After all, if three people try to sell you the same apple, there’s a good chance that they’ll each try to undersell one another to get your business.

In other words, in a market that’s truly free, customers will get the goods they want at the lowest prices that make sense for sellers.

This is good news for consumers, as the rise of over-the-top (OTT) programming might allow Americans to breathe easier as the cost of their content could become a whole lot cheaper.

In comparison, anyone who’s paid a cable bill recently knows just how costly cable services have become. After all, it’s rare enough that anyone is able to get just a pay-TV subscription. Instead, you’ve got to use your cable company as your Internet Service Provider and also your telephone carrier.

The prices of these three services add up, which is why a significant number of customers have decided to cut their cords, so to speak, and stop paying for cable television. Instead, they look to OTT providers—like Netflix, Hulu Plus and Amazon Prime—for their entertainment.

While households still need the Internet to access OTT content, they don’t need the landline telephones and pay-TV subscriptions that often are sold together with that digital connection. And that’s important, because cable bills are rising at about four times the rate of inflation. As such, it’s likely hard for many households to stomach their cable costs, particularly in this economic climate.

So, instead of having to pay for two expensive services, customers can now pay for just Internet, forking over a few extra bucks each month to a subscription OTT provider should they so choose.

Just how much do those OTT subscriptions cost? Well, for starters, Netflix plans start at $7.99 each month. And it appears that customers might have a wealth of new comparably priced plans from well-known providers in the near future.

Stay tuned for our next installment where we’ll break this down for you.