Pure Subscription Pricing of Netflix and Apple

Pure Subscription Pricing
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Introduction
Business worldwide are changing their pricing models to subscription-based approaches. However, finding the most appropriate model can be tricky for this business, as recently evidenced by the case of Netflix. For instance, if a company chooses a flat-rate subscription pricing, it might increase its subscribers quickly but the revenue and profits might stagnate as it offers more services for the same price (Hui, Yoo, Choudhary, & Tam, 2012). In this case, revenue growth becomes a challenge. Several companies are seeking rapid revenue increase by mixing flat-rate subscription with pay-as-you-go, where consumers simply pay for what they utilize. Currently, consumers are very demanding, requiring flexible pricing models. Subsequently, pure subscription pricing is unsuitable for services that require creating incentives for creators.
The Case of Netflix
Whereas competition is beneficial to customers, it can hurt subscription-based consumers. The subscribers of Netflix streaming services have already learned about the impacts of increased competition in the content industry. Currently, Netflix, Hulu, Amazon, and Apple dominate the video content streaming industry (Hui, Yoo, Choudhary, & Tam, 2012). While Disney is about join Netflix, WarnerMedia and NBCUniversal are about to start their streaming services. The industry initially dominated by Netflix through their subscription-based pricing is about to become fragmented.
For several years, Netflix was the one-stop shop for consumers of video streaming services. The company offered a wide range of licensed video content along with a consistently bulging library of original video productions. The plethora of video content enabled viewers to watch all-time favorites, such as The Office and Friends, as well as Marvel and Disney movies. However, Netflix’s product portfolio might soon shrink as several companies are planning mass exit from their deals. For instance, Friends has a plan of finding a new steaming home, which is the HBO Max. Moreover, The Office and other commonly watched shows, such as Parks and Recreation have become exclusive to Peacock, NBC’s streaming service since 2021. Disney has also created a plan to move its content to Disney+.
The changes experienced by Netflix, despite being competitive and expected to benefit customers, can have adverse impacts on consumers of video streaming service. In particular, the changes limited consumers to Netflix content only. Consumers who would prefer other content will have to subscribe to several streaming services instead of a one-stop shop, such as the originally created...