Tag Archives: services

Pricing in the Entertainment Streaming Industry

The entertainment streaming industry is on fire right now. Apple, Hulu, Netflix, Disney, HBO, and more brands are ramping up to fight it out for the monthly consumer subscription!

Here is how the current prices compare between services:

Service Monthly cost Shows
Netflix $12.99 Stranger Things
Hulu $11.99 (ad free), or

$5.99 (with ads)

Handmaid’s Tale
Amazon Prime Video $8.99 Marvelous Mrs. Maisel
Apple TV+ $4.99 The Morning Show
Disney+ $6.99 The Simpsons
HBO Max $14.99 Friends

 

Notice anything interesting in the prices? How each price ends? Which vendor is using penetration pricing? Or below-competition pricing? Name a price model and it’s probably on the list above. Blockbusters, as well as all-new created movies and shows are all offered from multiple services and it can be hard to determine which has which. The marketing focus should be on differentiation – the services are starting to sound alike, and be priced alike.

There has been a dramatic shift in recent years about how consumers get their information and entertainment, and how many more consumers use streaming services each year. The average consumer in 2019 has 2.6 stacked services. This is up from 1.6 stacked services in 2016, but far short of the projected 4.9 staked streaming services by 2023.

Think about it… how many services are currently in your household?

Group Activities and Discussion Questions:

  1. Poll students: How many subscription services does each household have today? Add them and average it for the class.
  2. Show a video about the topic: https://www.wsj.com/video/video-streaming-services-battle-for-subscribers/AED37E41-E1EC-447A-A47F-C55D1834B7E0.html
  3. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  4. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  5. For these streaming services, divide students into groups and have each group work on setting the price level.
  6. Assign each team a different model to use (demand-oriented, cost- oriented, profit-oriented, and competitor-oriented) and have the team explain how the model was used when setting their price.
  7. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: FitzGerald, D., & Flint, J. (29 October 2019). AT&T lays out price, show line-up for HBO. Wall Street Journal; other news sources

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Grandkids On-Demand

Even though it’s a fact of life, aging can be lonely. Friends and family members may have passed on, moved away, or moved into care facilities. And, caregiving for someone who is older can be hard when the caregivers also have other responsibilities such as families and full-time jobs. This was the need behind a new service called ‘Papa’ which helps provide senior citizens with a little extra attention through what it calls ‘Grandkids On-Demand’.

Papa has a simple premise – to provide college students to help senior citizens. It connects students with the seniors for tasks such as driving, shopping, reading, laundry, pet help, technology help, or even just companionship. It emphasizes a fun was for two generations to connect and frees senior citizens from being confined or left on the margins of life.

Members (the senior citizens) pay a monthly fee of $15 to $30 to belong, plus $15 per hour for visits from the Papa Pals (the college students). The Pals must be enrolled in college or working on a masters degree, social work degree, or nursing or medical degree. Pals must also have a four-door car and pass a background check. Pals are given the company’s personality test which look for people with empathy, patience, and the ability to draw people into conversation. The biggest focus is on curing loneliness; being with a younger person stimulates the seniors – relationships form to help both parties understand the world.

Become a Pal and help Papa.

Group Activities and Discussion Questions:

  1. Poll students: Do they have family members or friends that fall into this category? How do these people get assistance?
  2. Review Papa: https://www.joinpapa.com/
  3. Make sure to show some of the videos available on the Web site to illustrate how the service works: https://www.joinpapa.com/video-gallery/
  4. Discuss the components of a situation analysis: company, general industry, trends, key competitors, technology, legal, etc.
  5. Divide students into teams. Have each team use laptops to do general research to analyze the market for Papa. (Ex: overview of industry, size, growth, new technologies, environmental impact, etc.)
  6. Debrief the exercise by compiling information on the white board.

Source: Bahrampour, T. (20 June 2018). These college kids moonlight as ‘grandkids’ for hire. Washington Post.

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UberMOTO: Sharing Rides on Motorbikes

uber

Uber is evolving into more transportation formats than solely automobiles. Recently, Uber launched UberMOTO in Thailand – adding motorbike sharing to its growing fleet of transportation services. Bangkok, Thailand, is Uber’s first city for motorcycle services.

Why Bangkok? According to Uber, traffic speeds in Bangkok are under 11 kmh during rush hour, and the average daily commute takes nearly two hours. Motorcycle rides are an affordable and easy way to travel and cut commute times. Motorcycle taxis are popular in Thailand, China, Singapore, Vietnam, the Philippines, India, and Indonesia. UberMOTO has thousands of motorbike drivers already and is looking at expanding this mode of transportation in other emerging markets.

How popular will this new mode of transportation be? When UberMOTO launched, the demand was far greater than the supply available. The service does not yet regulate the number of riders allowed on one bike, and multiple passengers is often the norm in Thailand.

Might this be an option in traffic-clogged U.S. cities such as Los Angeles? Time will tell.

Group Activities and Discussion Questions:

  1. Show the Uber news release announcing the new service: https://newsroom.uber.com/thailand/ubermoto-en
  2. Show the video explaining UberMOTO: https://youtu.be/nO48P5wkk_Y
  3. Poll students: Who current uses ride-sharing services such as Uber and Lyft? Why are these so popular?
  4. Would students be willing to use UberMOTO in the U.S.? Why or why not?
  5. Divide students into teams. Have each team develop a marketing plan for UberMOTO.

Source: Wall Street Journal, Brandchannel.com, other news sources

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