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Why is content getting expensive when there is so much of it?

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  • Digital Team 

It is so interesting to compare the early stages of social media with what we have today. Our initial impression was that we got platforms to share personal moments with our loved ones and talk to those who are far from us. What turned out, was that social media is a better place for content creation rather than sharing personal stories with just a small circle of friends and families.

Research studies bring up interesting facts about how social media increased the volume of news and created a habit among users to consume the news through social media. Subsequently, every small and major news organization today is a part of the digital environment, ensuring their presence from social media to official websites. But why is getting quality content (stories, videos, podcasts) becoming more expensive than ever before?

Many news websites such as The New York Times, The Wall Street Journal, and The Guardian partially or fully require a paid subscription. Streaming services continuously raise the fees, making entertainment content consumption less affordable. Even when there is a whole YouTube with millions of songs, music streaming services show no signs of reviewing their prices in order to decrease them. Let’s understand the logic of these trends amid the abundance of various types of content and content platforms.

The Demand for Online Services

One of the reasons why content is getting more expensive is the growing demand for online services and products. When people prefer streaming movies over going to cinemas, Netflix, HBO, and other companies set higher goals that require bigger investments, hence increased subscription fees.

To understand the shift of preferences towards digital offers, a good example can be the gaming world, particularly casinos that had traditionally been a part of land-based entertainment culture. While the number of gaming fans has not decreased, the demand for traditional gaming has changed. In fact, today, gambling on online platforms is one of the top choices for many gamers. This perfectly explains the digitized user behavior which is typical to not only online casinos but also other types of content consumption.

Online services and products win the competition, even when we look at other sectors, and the main reason is convenience. More than 60% of consumers think that ordering delivery is more convenient than dining out, which makes the business of third-party delivery business truly profitable.

Similar to these analogies, in the field of digital content the demand increase is very logical, and as in many cases, it results in increasing prices. But this is not the only reason, so let’s get to the next one.

The Cost of Quality: Why We Pay More for the Good Products

Think back to the early days of YouTube, when the internet was full of blurry videos, shaky concert footage, and amateur vlogs. It was a wild period when people would just have some idea of what was streaming all about. Fast forward to today, and we’re spoiled for choice: slickly produced Netflix originals, true-crime podcasts with Hollywood-level production values, and independent creators putting out content that rivals traditional media. But all that polish comes at a price. Here’s why the best content often comes with a premium:

  • Talent Isn’t Cheap: Just like blockbuster movies, high-end digital content requires skilled teams of writers, filmmakers, editors, animators, etc. That talent expects to be paid, driving up production costs compared to the “one person with a webcam” era.
  • The Tech Factor: Delivering seamless, high-definition video and crystal-clear audio requires serious infrastructure and bandwidth. Streaming services and podcast platforms make significant investments in technology to ensure a smooth user experience, and those costs get passed on to us.
  • Competition is Fierce: Everyone wants a piece of the content pie, from tech giants like Amazon to niche independent studios. To stand out, platforms need to invest in original, buzzworthy content, driving up prices across the board. Remember when Netflix seemed cheap? Those days are gone as the streaming wars heat up.

The Personalization Paradox: How Our Data Drives Up Costs

We all love it when Netflix recommends a show that’s shockingly matching our interests, or when Spotify creates the perfect workout playlist. That delightful personalization isn’t magic – it’s powered by data. Lots of data. And guess what? Collecting, analyzing, and leveraging that data to tailor content recommendations costs money. Here are some facts to keep in mind:

  • Companies need to hire skilled (and expensive!) data scientists who can make sense of all the information we generate. Developing algorithms that can accurately predict our tastes takes serious expertise.
  • As consumers become more privacy-conscious, it gets harder for platforms to collect the granular data they need for truly tailored experiences. This could lead to a future where the most personalized content comes with a hefty premium to offset the increased cost of getting the necessary insights.
  • Content creators compete for our limited attention. Personalized recommendations are their secret weapon to keep us hooked. The more accurate the recommendations, the less likely we are to switch over to TikTok or browse a competitor’s platform. This willingness to pay for our attention becomes a self-fulfilling prophecy.

The more our world gets digitized, the more we appreciate the role of content for different purposes – from getting information to playing our favorite games. It’s very logical if, in the future, the prices of different digital services rise, given the facts we mentioned above. Let’s just hope that tech companies and media platforms will at least think about affordability and continuous improvement of production quality.

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