STATEN ISLAND, N.Y. -- Economists said June marked the highest rate of inflation in 41 years, and that means Americans are looking to eliminate unnecessary costs. For some, that might mean cancelling monthly streaming services, according to data journalism site, Stacker.
Streaming services changed the way Americans watch television. No longer do they huddle in front of the TV at prime time for the show of the week. Instead, they binge watch series as they are released on popular streaming services, like Amazon Prime, HBO Max, Hulu and Netflix.
Most streaming services provide exclusive programming at a monthly rate. But if you subscribe to multiple subscriptions, costs can quickly add up.
And with inflation impacting every aspect of most Americans lives, some streaming services in recent months have hiked up prices due to the rising cost of doing business. That means more money is coming out of consumers’ pockets.
Stacker cited data from the Bureau of Labor Statistics to look at the increase in spending on streaming since 2013. The website looked at how the pandemic and recent inflation have affected viewers.
A 2021 survey conducted by Mohu, an HDTV antenna provider, found that two in five Americans (44%) said they were planning to cancel at least one of their TV streaming subscriptions in the near future.
“The main reasons consumers gave for canceling? Rising costs and the lack of content,” said Stacker.
PRICE HIKES
Amazon Prime, Hulu, and Netflix are just some of the streaming services that recently raised subscription fees, according to Stacker.
As of February 2022, an Amazon Prime subscription, which includes access to streaming content, was updated to $139 per year ($14.99 per month). The previous monthly cost for a Prime Membership was $12.99 and the previous annual cost was $119, according to Stacker.
According to the Verge, Netflix this year raised prices for a standard plan costing $15.50 per month from $14, while the 4K plan increased to $20 per month from $18.
Late last year, Hulu raised its ad-supported streaming version from $5.99 a month to $6.99, while the ad-free tier increased a dollar to $12.99, according to Deadline.
While some streaming services were increasing prices, in January HBO Max, which is owned by WarnerMedia, offered potential subscribers 20% off its monthly plans, according The Street.
PANDEMIC IMPACT
Stacker says the pandemic supported the growth of streaming services. In fact, streaming subscriptions in 2020 surpassed 1 billion, according to Stacker.
“When the pandemic was at its height in 2020, there was a surge in the number of people and time spent watching and streaming TV,” said Stacker.
At the same, North American box office revenues plummeted to a 40-year low, based on an end-of-year report from research firm Comscore and compared to historical data from Box Office Mojo.
“With movie theaters forced to close, streaming dominated viewer programming,” Stacker said.
But come 2022, streaming services were faced with the challenge of market saturation, rising costs and and the task of keeping viewers satisfied and subscribed.
BILLIONS INVESTED
Billions of dollars have been invested in streaming services. For example, Netflix spent $17 billion on original content alone in 2021, Staker said.
“The increase in expenditures and inflation hiked up prices for customers,” said Stacker about Netflix.
A 2022 CNBC|Momentive Poll revealed that 52% of Americans said they are more financially stressed this year than last year. The poll also concluded that 39% of Americans have expressed canceling a monthly subscription due to inflation.
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