Has your Netflix bill increased? More ads popping up while binging a TV show? Maybe it’s more expensive than ever to play your favorite song on repeat.
U.S. Sen. Bob Casey’s office is tackling what they call “greedflation” — that includes streamflation. In a report released Wednesday, Casey’s office details how increased costs for streaming services are straining Americans’ finances.
Streamflation is defined as when streaming platforms offer less content and more restrictive services while charging higher prices to hike their profits, according to the report.
Casey said it’s another way corporations line their own pockets while raising costs on American families seeking quality products for a fair price.
In January the senator from Scranton, who is up for reelection, wrote to the Government Accountability Office. He asked that they examine the consequences of corporate greed on American consumers. Then in February, Casey, a Democrat, and his party colleagues introduced the Price Gouging Prevention Act. The bill would create a new federal ban on grossly excessive price increases and authorize the Federal Trade Commission (FTC) and state attorneys general to enforce the ban. A bill was also introduced in the U.S. House.
The current rate of inflation is 3%, said Jordan Petsas, Ph.D., professor and chair of the Department of Economics, Finance and International Business at the University of Scranton.
"It's a big issue. We can talk about the volatility of energy prices. We can talk about … the global situation, how it affects the U.S. economy. But the bottom line is that inflation, the price of products and services are getting more expensive," he said.
Petsas said prices have been increasing since the pandemic in 2020. Quality plays an important role.
"Consumers … either consume less or try to find substitutes," he said.
The report from Casey’s office points to Nielsen data, which says Americans watch over two hours of television a day for education and entertainment. Just under half of that time is spent on streaming platforms.
“As a result of this new normal, streaming companies have become emboldened to raise their prices,” the report says.
Every streaming platform has increased prices in recent years, the report says. On Tuesday, Disney announced the prices of most of its streaming plans will go up by mid-October.
Petsas said companies try to get more consumers by offering different options. Streaming services, for example, offer options to go ad free for more money a month or pay less and sit through ads in the middle of a movie.
"The consumers have to decide whether or not it's worth accepting advertising to save on a subscription," he said. "But the bottom line is that, if you want to save money, you may end up getting the lower quality or a lower level of service."
Paramount Plus dropped 64% of its offerings in just one year, the streamflation report says. The platform describes itself as “The Home of Star Trek” but removed 10 of the 13 Star Trek feature films the first six months of 2024.
“So we have inflation, we have also to take into account the cost of production is getting higher, and therefore, you know, that puts a pressure on profits,” said Petsas.
Companies do try to provide different incentives to make up for the cost increase, he said. Spotify, for example, is adding audio books.
"These price increases are coming with some value to consumers. Otherwise, why should I pay a higher price if the product is still the same? Or if the service is still the same? Companies have to be more innovative in terms of finding ways to justify these higher prices," he said.
Petsas researches international trade, business and economics. He teaches his students that the U.S. economy is affected by global factors and how important the country is in terms of the global arena, including international trade and international relations.
Petsas said the government can help through legislative action. But for policies to be effective, they must be well perceived.
The U.S. Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy held hearings in May on the Price Gouging Prevention Act.
To read the report Casey's greedflation reports, visit https://www.casey.senate.gov/greedflation
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