Two thirds of adults in the United States said they would cut back on subscriptions to save money in times of high inflation, and price increases could do their part in forcing people’s hands, according to recent findings from Statista’s “Global Consumer Survey.”
As consumers are grappling with inflation, trying to cut down on non-essential spending, Disney recently announced that it is raising the prices of Disney+ and Hulu later this year. The move comes as part of a broader restructuring of its streaming options, as Disney is simultaneously launching an ad-supported tier, which will keep the US$7.99 price tag of the current ads-free subscription.
Disney’s decision to raise its streaming prices comes just a few months after market leader Netflix took a similar step. In January, Netflix had announced the second price increase in less than two years, bringing the price of its standard plan to US$15.49 per month. The latest price increases come at an unpleasant time for consumers, who now face some tough choices when it comes to their entertainment budgets.
According to data published by Nielsen earlier this year, 58% percent of US video streaming subscribers pay for access to at least three different services. That is up from just 32% in 2019. The increasing fragmentation of the US streaming market, with Apple, Disney and HBO all launching their own services, has likely contributed to this trend.
In 2019, roughly two-thirds of US streaming subscribers had, at most, subscriptions to two streaming services like Netflix, Prime Video or Hulu. Netflix in particular dominated the picture in the United States, with 49% of respondents to a YouGov survey conducted in April 2020 claiming the platform was an essential video streaming service compared to just 31 and 22 percent thinking the same of Prime Video and Hulu, respectively.
Towards the end of 2019, major agents of change started to crop up in the domestic market. On November 12, The Walt Disney Company launched its streaming service Disney+, which stood at 130 million subscribers at the end of 2021. Ten days prior, Apple premiered its Apple TV+ offer, and throughout 2020, TV stalwarts Comcast and WarnerMedia joined the fray with Peacock and HBO Max, respectively.
This multitude of providers with well-known brand associations, combined with the coronavirus pandemic confining many US residents to the indoors during the past two years, is most likely the cause for more and more streaming service users diversifying their subscriptions. Fittingly, more than a quarter of survey respondents claimed to pay for more than five video streaming services simultaneously. Moreover, only one in twenty participants in the Nielsen survey felt negatively about their streaming experiences and 69% said they had not canceled any subscriptions in the past twelve months.