With inflation taking a toll on American wallets, it’s no wonder many are reconsidering the number of subscription services they pay for. One analyst estimates Americans are spending a jaw-droppingly higher amount than just two years ago.
The Labor Department released a report last week showing the Consumer Price Index – the benchmark for inflation – rose 3.2% over a year ago, with an increase of 0.2% in July.
Streaming services aren’t an exception, with a number jacking up prices to account for higher costs.
Peacock and Paramount+ raised prices from $9.99 to $11.99. Disney+ will increase its prices to $10.99, Hulu raised prices to $14.99, and Netflix is now up to $15.49 a month. The most expensive streaming platform is Max, costing $15.99 a month.
While overall inflation, prices are still up significantly from just two years ago.
That was best illustrated by a tweet sent by Mark Zandi, chief economist of Moody Analytics, who said inflation is still hitting hard.
“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,” said Zandi. “And they spent $709 more than they did two years ago.”
While housing, groceries, and car insurance rates show the largest increases, cable and streaming services costs have also gone up. Stagnating wages paired with increasing prices is causing a lot of people to not only cut ties with cable but also scale back on the number of streaming services they subscribe to.
Last month, Aluma Connected Media Insights said 35% of streaming subscribers are considering cutting back on the number of services they pay for. This percentage is up from 25% in 2022.
Cord cutters have a wide variety of streaming services to sign up for, so they can be choosey on what they pay for. As free ad-supported streaming options like Tubi and Pluto pop up, customers can find the content they want to watch without the monthly subscription fees. Free options can inspire more people to cut paid SVOD subscriptions if they offer the same or similar content without the fees.
As a result, several paid streaming platforms are combating membership loss by offering bundle packages to give customers more bang for their buck. Subscriptions like Disney+ offer bundles that also include Hulu and ESPN. Spotify Premium members also get Hulu. Verizon’s +Play is the first to bundle Netflix with other subscriptions. This bundle offers Paramount+ along with Showtime.