Summary:
Amid current economic uncertainties and growing inflation, households are searching for ways to reduce expenses. According to data from Parks Associates, monthly spending on streaming subscriptions has dropped 25% from $90 in 2021 to $73 in 2023. In response to rising inflation, streaming services have increased their prices, causing users to reevaluate the number of services they need. Despite this, consumers are unlikely to return to cable, with millions of homes planning to drop cable 2027, according to PWC’s Entertainment and Media Outlook report.
Streaming services experienced a surge in users during the pandemic, with many Americans paying for multiple subscriptions. However, the number of subscriptions has since decreased, with Americans now paying for about three or four services. In June, 38% of Americans expressed their intention to cancel or limit their streaming subscriptions. Some users also plan to downgrade to cheaper options or share passwords with friends and family.
The rise in inflation has further impacted streaming services, as platforms raise their fees to compensate. Notable price increases include Peacock and Paramount+ raising prices from $9.99 to $11.99, Disney+ raising prices to $10.99, Hulu increasing prices to $14.99, and Netflix reaching a monthly cost of up to $15.49. Chief economist Mark Zandi of Moody Analytics highlighted how inflation has affected household expenses, stating that the typical household spent $202 more in July compared to a year ago and $709 more compared to two years ago.
Despite the current cooling period for streaming services, the shift away from cable is expected to continue. PWC’s Entertainment and Media Outlook report predicts that nearly 50 million homes will drop cable 2027.
Sources:
– Parks Associates
– PWC’s Entertainment and Media Outlook report
