As inflation continues to impact American households, many are reevaluating their spending on subscription services, including streaming platforms.
Recent data indicates that US households are shelling out considerably more than they were just two years ago. The Consumer Price Index, a key measure of inflation, has risen by 3.2% compared to a year ago, with a 0.2% increase in July alone.
Even streaming services are not exempt from the trend, as several have increased their prices to offset higher costs. Notable hikes include Peacock and Paramount+ raising their prices from $9.99 to $11.99, Disney+ planning to raise its rates to $10.99, Hulu at $14.99, and Netflix now priced at $15.49 per month. The priciest option is Max, charging $15.99 monthly.
This surge in prices is evident when considering a recent tweet by Mark Zandi, the chief economist of Moody Analytics, who emphasized the significant impact of inflation.
To be sure, the high inflation of the past 2+ years has done lots of economic damage. Due to the high inflation, the typical household spent $202 more in a July than they did a year ago to buy the same goods and services. And they spent $709 more than they did 2 years ago.
— Mark Zandi (@Markzandi) August 10, 2023
He stated that households spent $202 more in July compared to a year ago for the same goods and services, and a staggering $709 more than they did two years ago.
As housing, grocery, and insurance costs also escalate, coupled with stagnant wages, many consumers are opting not only to cut the cord on cable but also to reduce their streaming service subscriptions.
A report from Aluma Connected Media Insights revealed that 35% of streaming subscribers are contemplating trimming their services, a notable increase from the 25% reported in 2022.
To adapt to this evolving landscape, streaming platforms are introducing bundle packages to provide customers with added value. For instance, Disney+ offers bundles that encompass Hulu and ESPN, while Spotify Premium members enjoy Hulu benefits. Verizon’s +Play bundle notably includes Netflix along with Paramount+ and Showtime.
In response to the rise of free ad-supported streaming alternatives like Tubi and Pluto, consumers are becoming more discerning about their subscriptions.
