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Streaming Service Pricing Strategy Evaluation

A new video streaming service is deciding between two pricing models: (1) a 'Pay-Per-View' model where customers pay a fixed price for each movie or show they watch, and (2) an 'Unlimited Subscription' model where customers pay a flat monthly fee for access to the entire library. Critically evaluate the 'Unlimited Subscription' model from the perspective of both the consumer and the company. In your evaluation, explain how the principle of diminishing satisfaction from consuming additional units of a good influences the behavior of consumers and the potential profitability for the company.

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Updated 2025-08-09

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