Americans Are Cutting Back Streaming Service Spending As Cord Cutters Become More Budget-Savvy





A young woman is sitting in her kitchen and is loking at her receipts at home while using a smart phone

Consumers are using fewer – and spending less on – streaming services, but paring down subscription services and saving money doesn’t mean viewers are in an entertainment deficit. 

The average number of streaming services used by consumers decreased from 11.6 in the fourth quarter of 2022 to 10.9 in the second quarter of 2023, according to TiVo’s Video Trends report. This decline was accompanied by less spending, from an average of $189 a month to $170 over the last six months. 

Streaming services are seen as a cheaper alternative to cable, but the industry hasn’t gone unscathed amid the economic uncertainties of the last few years. The rise of cord cutting and inflation have put both customers and streaming service companies in difficult positions. While viewers are tightening their belts, streaming platforms are hiking prices. A deal or promotion will restart some canceled subscriptions, but discounts are a short-term solution for companies. 

“With less disposable income available among consumers, the demand for flexibility in entertainment choices has surged in response to the evolving preferences in entertainment over the recent years,” the report said.

Increasingly, viewers are opting for ad-supported video on demand, or AVOD, and free ad-supported streaming TV, or FAST. AVOD and FAST channels include apps like Freevee, Crackle, Pluto TV, Tubi and Roku Channel. 

Last December, info tech company Parks Associates found similar data – more households reported using free ad-supported services by the end of 2022, citing content and price as adoption drivers.

Time spent watching AVOD and FAST services increased 6% from 2022 to 2023 according to TiVo’s report. In addition, ad-supported tiers of subscription video on demand services, SVOD, have increased. Peacock, Hulu, Paramount+ and Max all reported more subscribers to their ad-supported tiers, according to TiVo.

A boost in ad-tolerance has also worked in favor of AVOD and FAST services. According to the report, 62% of respondents said they were at least tolerant of ads. 

For now, TiVo considers a blend of the different types of services the best option.

“This new SVOD/AVOD hybrid structure allows users to consolidate their subscriptions, cut costs and still watch the same or more amount of content,” the report said. 

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