Avenues to escape daily stress are narrowing, with more Americans forced to give up some of their streaming services to save money, according to a new study.
About 40% of Americans polled by consulting firm Deloitte said that they’ve cut back in the last three months on entertainment subscriptions because of financial concerns. About half of all consumers said they pay too much for their streaming video services, and nearly 75% expressed frustration that prices of their entertainment subscriptions continue to rise, the study said.
“High food and gas prices, as well as other inflationary items are taking a toll on Americans’ discretionary spending,” said Steven Conners, founder and president of Conners Wealth Management. “They’re forced to cut the one thing they love most – entertainment.”
While Americans may feel a void with fewer opportunities to binge-watch, financial advisers cheer the move.
“Someone actually auditing their subscriptions and making cuts is … a financially aware person taking action, and I’d call that a positive trend,” said Christopher Walsh, regional marketing director and financial advisor at Capital Choice Financial Group.
“Cutting back on streaming is generally a good move for a couple reasons,” Walsh said. “You stop wasting money on things that aren’t bringing you real value and free up money that could be going toward debt, life insurance or retirement contributions your future self will thank you for.”
How Much Do Americans Spend on Streaming?
Americans love their streaming services, with 83% saying they watch videos on them, according to Pew Research last year. Only 10% said they’ve never used a streaming service.
For this luxury, the average subscribing household spends $69 monthly on their video streaming service subscriptions, Deloitte said. Millennials spend more than any other generation at an average of $76 per month.
Prices Are Rising
Netflix raised the monthly price of its ad-supported tier by $1 to $8.99 per month, according to plans and pricing listed on the streamer’s online Help Center. The ad-free plans increased by $2 a month.
The monthly prices started March 26 for new subscribers. Current members are being notified by email a month before the new prices go into effect for them, Netflix said in a statement. (The exact timing depends on the specific member’s billing cycle.)
Is Now a Good Time to Increase Prices?
Sixty-one percent of consumers said they would likely cancel their favorite streaming video-on-demand service if the monthly subscription price increased by $5, Deloitte said.
Deloitte didn’t survey smaller increases like Netflix’s $1 and $2 per month.
What Will Americans Do Instead?
As for new pastimes, there are still free options like YouTube for those who want to continue watching something on the couch, Conners said.
But with summer ahead, “perhaps it will get people outside more,” he said. “Exercise, reading and other low-to-no cost alternatives can be a great replacement.”
And for the savings from cutting a subscription entertainment service?
“Where the money goes next is what matters,” Walsh said. “In my practice, that conversation usually ends with someone paying down a credit card, finally getting the life insurance their family needs or putting more towards retirement. That’s a pretty good outcome for canceling Netflix.”
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
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