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June 25, 2024

More People Are Cutting Back On Streaming Services As Prices Rise

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Jan 4, 2024

A growing number of Americans are canceling their subscriptions to popular streaming services like Netflix, Hulu, and Amazon Prime Video as prices increase. ## Recent surveys and data show streaming cancelations accelerating

According to a recent report from Antenna, a data analytics firm, 6.6 million subscribers canceled at least one streaming service in November 2022. This represents a massive 45% year-over-year jump in cancelations.

Additionally, Digital TV Research predicts that by 2027, 57 million Americans will have dropped at least one streaming subscription as viewers grow frustrated over rising prices and fragmented content libraries across too many services.

Streaming services raising prices, adding ads

Several factors are driving this wave of cancelations. Key among them is that major streaming platforms have been steadily raising their monthly fees. Netflix, for example, has increased its most popular plan from $10.99 to $15.49 per month over the past 3 years. Other services like Hulu and YouTube TV have also seen price hikes.

In addition to higher monthly costs, some services like Netflix and Disney+ have debuted new ad-supported tiers to boost revenue. While these levels are cheaper, surveys show a majority of subscribers would rather cancel than see ads.

Consumers re-evaluating streaming budgets

As the total cost of streaming content rises to over $100 per month for many households, analysts say more consumers are stepping back to re-evaluate where they want to allocate their entertainment budgets.

“Viewers today have more choice than ever on how to access TV content,” said Brett Sappington, principal analyst at Parks Associates. “With new streaming services still entering the market and competition for subscribers intensifying, price and user experience have become major differentiators.”

Cord-cutting promise fading for some

Industry experts note that this increasing dissatisfaction stands in stark contrast to the early promise of cord-cutting. For years, switching from traditional cable TV bundles to à la carte streaming was sold as a more flexible and cost-effective way to watch content. But now streamers face the same bloat and price fatigue issues that originally pushed cable cord cutters to shift to streaming in the first place.

“Streaming was supposed to make everything cheaper for consumers,” said Luke Bouma, cord cutting expert and founder of CordCuttersNews.com. “But now we are seeing services raise prices, put ads on cheaper plans, and ultimately force people to pay more than cable TV if they want to keep all their shows.”

Bouma added, “The days of unlimited cheap streaming ended a few years ago. And this new reality is setting in for many former cord cutters.”

Strategies emerging to reduce streaming spend

Faced with less content and shrinking value, a portion of streamers are taking action to cut costs. According to surveys by Kantar Media and MoffettNathanson, the top ways users are modifying their streaming behavior include:

  • Canceling 1 or more paid streaming subscriptions
  • Downgrading to cheaper, ad-supported tiers
  • Switching between services more often to chase specific shows
  • Sharing logins and passwords to reduce personal spend
  • Seeking out free, ad-supported streaming options
Streaming Service Avg Monthly Cost Avg Hours Watched Per Month Cost Per Hour Watched
Netflix $15.49 12 hrs $1.29
Hulu $14.99 5 hrs $3.00
Disney+ $10.99 4 hrs $2.75
HBO Max $14.99 3 hrs $5.00

This table shows how the cost per hour watched varies widely by streaming service. As prices rise, analyzing these hourly costs can help consumers choose services and budgets wisely.

Ad-supported tiers poised for growth

As more viewers look to cut costs, streaming platforms with ad-supported options appear best positioned to benefit. Services like Peacock, Paramount+, and the new ad-supported Netflix tier let price-sensitive subscribers pay less or nothing per month in exchange for commercials.

Surveys by Kantar show over 75% of streamers are at least open to trying these ad-based tiers. And platforms like Roku and Tubi that were ad-supported from the beginning are seeing sharp growth.

“Ad-supported OTT represents a huge area of opportunity,” said Ross Benes, eMarketer analyst. “Viewers have shown increased willingness to view ads in exchange for cheaper or free content.”

Will this spark a wave of “stream-stopping”?

Looking ahead, analysts say current cancelation trends could mark an inflection point in consumer streaming habits. If prices and frustrations continue rising while economic uncertainty lingers, even more subscribers may conclude the costs outweigh the benefits.

MoffettNathanson researchers coined the term “stream-stopping” to describe this potential movement away from streaming. They note over 1 in 4 streamers say they would cancel “all” paid services if economic conditions worsen in 2023.

For now, most experts think outright stream-stopping will remain confined to a vocal minority. But with growth slowing industry-wide, all streamers have incentives to listen to cost complaints and better demonstrate lasting value to fickle modern audiences.

So in summary, while cord-cutting offered early promise of simplicity and savings compared to cable bundles, the rapid price hikes and fragmentation of streaming in 2023 are now pushing more consumers to trim back their streaming budgets or cut some services entirely. How broadly this newly intensified cost consciousness ripples across the streaming landscape may depend on platforms’ willingness to restrain fees or cater to ad-supported demands in the months ahead.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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