Streaming and software plans are reorganised frequently, with features moving between tiers and new levels appearing. The rearranging is a continuing search for the most profitable way to divide customers.
Tiers exist to sort by willingness to pay
Different customers value the same service very differently, and a single price either loses the low-value ones or undercharges the high-value ones.
Offering several versions at several prices lets each group select the one matching what it will pay.
The provider earns more from this arrangement than from any single price, which is why tiering is close to universal.
The cost of serving each tier is often almost identical, so the difference between the plans is a pricing decision rather than a difference in what is delivered.
The dividing features must be chosen carefully
A tier boundary works only if the feature separating the plans matters to one group and not to another.
Video quality, simultaneous streams, offline access and advertising all perform this role, since households value each of them differently.
Choosing the wrong divider means everyone picks the cheap plan, which is why the boundaries are adjusted repeatedly.
Screen counts have proved a particularly effective divider, because they map onto household size, which correlates closely with what a household will pay.
Middle tiers are positioned rather than designed
A three-tier structure typically directs attention to the middle option, which is made to appear the sensible compromise.
The cheapest tier is often restricted enough to be unattractive, and its function is to make the middle look reasonable.
Comparing tiers against actual usage rather than against each other cuts through this, and frequently points to the cheapest plan.
Content and licensing keep moving the ground
Streaming catalogues change as licensing agreements begin and end, so what a tier includes is not stable even when its price is.
Rights are also regional, which means the same tier at the same price offers different content in different countries.
Comparisons between services therefore date quickly, and a recommendation from a year ago may describe a catalogue that no longer exists.
Frequent restructuring is itself a strategy
Continuous change makes it hard for subscribers to hold a settled view of value, which reduces the likelihood of a considered cancellation.
It also creates repeated opportunities to move customers upward, since each restructure presents the plans afresh.
Reviewing what is actually watched or used against what is being paid for, on a regular schedule, is the counterweight to a structure that keeps shifting.