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Why Streaming Might Cost More if You Move to a New City

Why Streaming Might Cost More if You Move to a New City

With a background in sports and entertainment reporting, he’s covered everything from Broadway to college football. He cut the cord in 2014 and has a sharp eye for streaming trends and a soft spot for Hallmark movies.

By virtue of the fact that you are reading an article on a website that covers the streaming industry, chances are pretty good that you understand just how big of a business television can be. However, it’s not just the talent, creatives, executives, studios, and corporations that make money off of the industry, state and municipal governments have also long gotten their cuts of the home entertainment pie. But, as the television medium moves further and further away from the traditional broadcast and cable models, many local governments have seen their revenues substantially decline as well.

Most states have been charging cable companies franchise fees for decades — up to 5% of revenue — in exchange for the cablers using public utilities to get their services to customers. But as more and more consumers have cut the cord in favor of getting their programming from streaming services, states and municipalities have begun trying to recoup those lost tax dollars in a multitude of ways with varying degrees of success.

While 33 states have mandated that streaming services must collect sales taxes (effectively raising the price of a subscription), numerous cities and states across the country have filed individual and class-action suits in an effort to force streamers to pay the franchise fees originally designed for cable companies. While many of the suits have been dismissed in favor of the streamers, the Ohio Supreme court has yet to rule on the case brought by the town of Maple Heights. If the Buckeye State’s highest court rules in favor of the town, the implications could impact far more people than just Maple Heights’ 22,000 residents.

However, even without lawsuits going in their favor, state and local governments are still finding ways to generate income from streaming services. In the state of Florida, streamers are required to pay a communications tax, while in the city of Chicago, they are subject to an amusement tax, which was originally designed for concerts and sporting events. If the Ohio Supreme Court sides with the streamers, these more niche taxation options could be the next step for governments to regenerate lost income, meaning that moving from one city or state to another could dramatically increase (or even decrease) your streaming bill depending on the laws that have been imposed in your new location.

As streaming proliferation continues, governments and services also must navigate the increasingly intricate world in which most customers are engaging with the services. In many cases, consumers are signing up for streamers as part of some sort of package, many via a cable, cellphone, or video game bundle. But as noted in a recent Deloitte Insights report, the integration of multiple services makes determining the sales tax and potential franchise fee responsibilities difficult to untangle.

Furthermore, while streamers like Netflix are struggling to figure out how to curb the rise of password sharing, it also presents issues when trying to determine what jurisdictions should tax monies. While most providers default to the billing address as the location whose taxes laws must be followed for each individual account, Congress has proposed updating the guidance for such situations.

However, if and until some sort of national legislation provides uniform rules for streamers in terms of taxes and franchise fees, the landscape will continue to be made up of a dizzying patchwork of disparate rules and regulations that ultimately makes things more difficult — and likely more expensive — for the average consumer.

The initial allure of cutting the cord was that it was supposed to be cheaper and easier than subscribing to a traditional cable or satellite service. While the streaming revolution is already into its second decade; and as services have begun to reassess how they fit into the market; local, state, and federal governments are still woefully behind on how they oversee what is quickly becoming a must-have utility, and as these things seemingly always do, it will almost certainly be the customers who end up paying for it.


Matt Tamanini is the News Editor at The Streamable, where he oversees daily news coverage and editorial strategy, with a particular focus on breaking stories, streaming comparisons, and major industry events. A well-rounded journalist with a diverse background, Matt joined The Streamable in 2022 after holding key editorial roles at several high-profile outlets. He has an extensive career in sports and entertainment journalism, having served as a senior editor for BroadwayWorld, the world’s largest theater website, and as managing editor for Land-Grant Holy Land, which covers Ohio State sports.

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