With inflation soaring across the globe, cost-conscious streamers are questioning which subscription services are “must-haves” and which they can comfortably live without.
Inflation rose at its fastest pace in more than 40 years this past month, with the cost for food, gasoline and housing all rising across the world.
The U.S. Labour department announced on Apr. 12 the consumer price index jumped 8.5% in March from 12 months earlier, the highest jump seen since 1981.
As a result, around 36% of Americans are considering cutting a monthly subscription like Netflix or Amazon Prime Video to rein in their spending, according to a survey conducted by Momentive for CNBC and Acorns.
35% of people across the country have already cut services to save money.
And it’s not just U.S. Households tightening their TV entertainment wallets.
In the U.K., following a decade of near uninterrupted growth for streaming services, the number of homes paying for at least one subscription streaming service fell by 215,000 alone at the start of 2022, a Kantar Worldpanel report found.
And the biggest loser? Disney+.
The Kantar report found that while Amazon Prime and Netlix were considered “must-have” services offering the likes of action series, Reacher, and dramas Ozark and Inventing Anna respectively, Disney+ saw 12% of its U.K. Customers walking away from their deals — triple the rate seen in the last quarter of 2021.
End of the lockdown streaming boom?
Kantar Worldwide found that around 16.9 million households in the U.K. Have at least one subscription service, and on average households were subscribed to 2.4 services at the end of the first quarter of 2022.
But while Q1 of 2022 saw a steady growth of 1.29 million new subscriptions, this was outweighed by 1.51 million cancellations, with half a million people attributing the cancellation to “money saving.”
“Netflix and Amazon can be seen to be the last to go when households are forced to prioritize spend,” Dominic Sunnebo, the global insight director at Kantar Worldpanel, told the Guardian.
“Netflix is consistently ranked number one in importance regardless of what platform it is put up against. But for the likes of Disney+, the implications are significant,” Sunnebo added, noting Disney+ must turn its attention to getting households to switch from other services like Netflix and Prime, rather than see itself as another incremental addition.
Kantar predicted similar figures to the Momentive survey, finding 28% of people were reportedly looking to cancel at least one of their streaming services in order to save money.
“In times of financial uncertainty, services need to be indispensable in subscribers’ minds,” said Sunnebo.
“As a result, it’s now more critical than ever that [subscription video on demand] providers demonstrate to consumers how their services are indispensable in the home in what has become a heavily competitive market.”
Netflix rebound?
Although still seemingly the darling of streaming, Netflix report their earnings on Tuesday afternoon, and analysts are not anticipating good news.
Despite adding over eight million subscribers in the last quarter, Netflix saw its stock tumble by more than 20 percent in January after it announced it was expecting to see a decline in its Q1 2022 growth.
It blamed the slow growth on rising subscriber prices and highly anticipated content that wouldn’t arrive on the platform until March.
Matthew Harrigan, an analyst at the Benchmark Company, remained cautious in a note issued on Monday, predicting Netflix would post net subscriber growth of 1.2 million, minus one million because of the loss of Russian subscribers.