Price comparison: streaming services in Switzerland, Germany and the USA
Many people in Switzerland believe that streaming services are especially pricey in this country. Having done the math, I’ve realised it’s not quite that simple.
You’ve seen the newspaper headlines. You’ve heard what people are saying down the pub. And you’ve read the outrage in the comments. Greedy streaming platforms in the US are milking Switzerland for all its worth – and it’s not fair. When we published a news article on Netflix’s most recent price increase, this opinion garnered widespread approval in the comments section.
What bothers me is the excessive Swiss surcharge of more than 50 per cent compared to Germany. There’s no justification for it.
However, this issue is more complex than it appears at first glance. Firstly, people often overlook factors such as exchange rates and VAT. Secondly, the resentment might be fuelled by different hypotheses:
- Netflix and the like earn more money through Swiss subscriptions.
- Streaming is putting a bigger dent in Swiss household budgets than those in other countries.
In this article, I’ll be using stats to put both assumptions under the microscope. I’ll compare five streaming platforms: Netflix, Disney, Apple, Spotify and YouTube. To do so, I’ll adjust their prices to account for exchange rates and taxes, then purchasing power and income equality.
The absolute prices
Over the past few years, all five platforms have continuously increased their prices. This chart shows the figures for Switzerland (first slide), Germany (second slide) and the US (third slide).
Throughout the article, the figures mentioned relate to:
- Netflix: standard subscription
- Disney+: cheapest ad-free subscription
- Apple TV+: standard subscription
- Spotify Premium: individual subscription
- YouTube Premium: individual subscription
You might’ve spotted the drastic difference between countries when it comes to price fluctuations at Disney+. Subscribing to the platform in the US is now 129 per cent more expensive than it was in 2020. Meanwhile, prices have risen 51 per cent in Switzerland and 43 per cent in Germany. This is linked to the fact that Disney now only offers ad-free, 4K premium subscriptions in the US, which cost more by definition. In Europe, you can still get a standard ad-free subscription in Full HD.
What’s more, in Switzerland, a Full HD Netflix subscription costs almost twice as much as an Apple TV+ subscription in 4K. The streaming juggernaut cites its considerably wider selection of content to justify this. While Netflix’s library spans 7,663 films and series, Apple’s only comes to 252. Disney+, on the other hand, offers 2,526. That makes Apple’s subscription the most expensive on a per-piece-of-streamable-content basis (4.33 cents). By the same measure, Netflix’s subscription is the cheapest (0.27 cents). It’s a matter of debate whether widening the availability of content also translates into added value.
How much more do streaming platforms earn in Switzerland?
For a fair comparison between countries, I converted all prices into US dollars using historical exchange rates. I also deducted VAT from the prices in Switzerland and Germany, as this isn’t included in the US prices. As a result, the figures reveal how much each company actually earns per subscription. On the first slide, you’ll see the average figure, while the rest show individual figures for each platform.
On average, the five platforms currently earn 16 per cent more from a Swiss subscription than a US one. The gap’s widest when you look at YouTube (32 per cent), followed by Netflix and Spotify (both 20 per cent). However, the differences are even more striking when you compare Switzerland with Germany. On average, German subscriptions bring in 61 per cent less for streaming giants than Swiss subscriptions and 39 per cent less than US ones.
Like the previous comparison, this is just an approximation. It doesn’t say anything about how much profit is left over from that revenue in each country. This is because Netflix and other platforms pay different licence fees and spend varying amounts on advertising in different regions. Even so, it seems very likely that subscriptions sold in Switzerland generate higher profits than those in Germany.
How affordable are streaming services?
These price differences aren’t random. Profit-driven companies centre themselves around exactly that: profit. They’re not wondering how much they need to charge you to cover their costs. They’re thinking about how much they could charge you without scaring you off. And that limit varies from country to country.
Purchasing power is the magic phrase here. A well-known indicator for measuring this is the Big Mac Index; the more expensive a Big Mac is in a particular country, the higher the purchasing power of the population. An even more convincing measure is the OECD figures on average wages adjusted for purchasing power. This is what I use to calculate how our subscription costs would translate in the US. In other words, how affordable is a Netflix subscription in the US compared to Switzerland?
As you can see, the lines come pretty close to each other once you adjust for purchasing power. After doing the calculation, the gap between Switzerland and Germany shrinks the most. Even so, it still seems like streaming subscriptions in the US are less of a burden on household budgets. So does Netflix think Europeans are more willing to sacrifice other expenses so that they can get their fix of Stranger Things?
Not necessarily. You see, even this measurement has its shortcomings. According to the World Inequality Database, wages in the US are more unequally distributed than in Switzerland. That means the average wage doesn’t really reflect what a real «average citizen» can afford. More specifically, the bottom 90 per cent of the US population earns only 53 per cent of the country’s total income. In Switzerland it’s 70 per cent, while in Germany it’s 63 per cent. Here’s the picture that emerges if I adjust subscription prices for income equality:
Looking at the prices from this perspective puts Switzerland and Germany in an even better position. However, the year and streaming platform determine which country comes out on top. From looking at the chart, you could say subscription costs place a pretty much equal burden on the bottom 90 per cent of incomes across countries. Naturally, there are also regional differences within countries that aren’t displayed here.
Verdict: streaming in Switzerland is pricier, but not more painful
Yes, streaming is more expensive in Switzerland than it is in other countries. However, the gap between Switzerland and the US is relatively small. On average, Netflix, Disney, Apple, Spotify and YouTube only make 16 per cent more money with Swiss subscriptions. The more striking difference is between Switzerland and Germany, where streaming platforms charge 61 per cent less.
Source: Shutterstock
But if you think a consumer in Berlin can afford twice as many subscriptions as a consumer in Zurich, you’re mistaken. Adjusted for purchasing power and income equality, streaming subscriptions in Germany hit users’ bank balances almost as hard as they do in Switzerland. At the moment, Swiss subscribers actually bear less of a financial burden than those in the US.
Like most global service providers, Netflix and co. adapt their prices to the exact economic circumstances of the local population. There’s a philosophical discussion to be had about how fair this capitalist reality is. Hopefully, you now have a solid foundation of data to help you take part in it.
The comment section’s all yours.
Header image: Samuel Buchmann
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Samuel Buchmann
Senior Editor
Samuel.Buchmann@digitecgalaxus.chMy fingerprint often changes so drastically that my MacBook doesn't recognise it anymore. The reason? If I'm not clinging to a monitor or camera, I'm probably clinging to a rockface by the tips of my fingers.
