Households are looking for ways to cut back on spending amid current economic uncertainties. Over the last few years, monthly spending on streaming subscriptions has declined 25% from $90 in 2021 to $73 in 2023, according to data from Parks Associates. On the flip side, more households reported using free ad-supported services by the end of 2022 citing content and price as adoption drivers.
Belts are tightening across the board in response to growing inflation. Streaming services are seen as the cheaper alternative to cable, but more platforms are hiking prices and users are reevaluating just how many services they need.
Last month, the Labor Department reported that the Consumer Price Index – the benchmark for inflation – rose 3.2% over a year ago, with an increase of 0.2% in July. In turn, streaming services increased their fees. Peacock and Paramount+ raised prices from $9.99 to $11.99. Disney+ will increase its prices to $10.99, and Hulu raised prices to $14.99. A Netflix subscription now costs up to $15.49 a month. Max comes in at the most expensive, costing $15.99 a month.
“Due to the high inflation, the typical household spent $202 more in July than they did a year ago to buy the same goods and services,” Mark Zandi, chief economist of Moody Analytics tweeted at the time. “And they spent $709 more than they did two years ago.”
Streaming services saw a massive influx of users in 2020 when most of the world was indoors. Reports said that many Americans were paying for up to six streaming services. Since then, numbers have mostly returned to pre-pandemic with Americans paying for about three or four subscriptions. In June, 38% of Americans said they were planning to cancel or limit the number of streaming services they pay for. Others said they planned to downgrade to cheaper options or share passwords with friends and family.
Despite the cooling period streaming services are experiencing, it doesn’t look like consumers will be going back to cable. Almost 50 million homes plan to drop cable by 2027, according to PWC’s Entertainment and Media Outlook report in June.