Americans Spend $48 per Month on Video Streaming Services — and Half of Those Surveyed Say That’s Too Much

Subscription fatigue among consumers is only getting worse, making it even more challenging for direct-to-streaming video providers to retain customers, according to Deloittes latest Digital Media Trends survey.

As streaming video competition continues to intensify, subscription growth rates across the industry have slowed and churn rates have increased, according to the Deloittes 17th annual Digital Media Trends report. On average, U.S. consumers pay $48 per month for subscription-video services, Deloittes survey found. About half of those surveyed agreed that they pay too much for SVOD services, while about one-third said they intend to reduce their number of entertainment subscriptions.

Its the first time Deloittes Digital Media Trends survey asked respondents to put a dollar figure on their subscription-video spending. The number of SVOD services per U.S. household has held steady at around four for the last several years, while the rate of inflation has outpaced the sectors price increases, according to Kevin Westcott, Deloittes U.S. technology, media and telecom leader.

In general, consumers are looking to cut back on SVOD because of cost-of-living increases, Westcott said: When the price of fuel, food and housing go up, people are rethinking their discretionary spending.

Around half of consumers (47%) surveyed said they have made at least one change to their entertainment subscriptions because of their current financial situation, such as canceling a paid service to save money, switching to a free ad-supported version of a service or bundling services together.

Per the study, which was fielded in the fall of 2022, overall subscriber churn for subscription video-on-demand services over a six-month period was around 44% (representing consumers who said they canceled an SVOD service in the previous six months) averaged across paid services. Thats notably higher than the 37% six-month U.S. churn rate Deloitte reported in 2022. On the most recent study, among Gen Z and millennial respondents the six-month churn numbers jump to 57% and 62%, respectively.

The upshot: Subscription video players need to adopt and accelerate new strategies to reduce churn, Westcott said. Original TV shows and movies are great at attracting customers but they dont work well at retaining them, he said: The race to continue to add customers by commissioning and acquiring really high-cost content will not succeed on its own. Instead, Westcott said, SVOD services should invest in diversifying the content on their platforms, including considering incorporating user-generated short-form video, music and games. (Netflix has already embarked on a strategy to offer games as part of its core subscription service.)

According to Deloittes 2023 Digital Media Trends survey, millennials are the most likely to have made changes to digital media subscriptions due to economic pressures. Indeed, millennials spend more than any other generation on paid streaming video services an average of $54 per month. Nearly 45% of millennials have churned and returned with a paid SVOD service, canceling a paid subscription only to renew that same subscription within six months, per Deloittes study.

Other findings:

More than half (54%) of consumers surveyed and nearly three-quarters of Gen Zs and millennials said they often watch a TV show or movie on a streaming video service after hearing about it on social media.32% of consumers surveyed said they consider online experiences to be meaningful replacements for in-person experiences. Among Gen Zs and millennials, that rises to 50%.About four in 10 respondents agreed that its hard to determine when user-generated videos are sponsored or contain an ad. Nearly half of consumers (46%) say that if an online creator they trust has reviewed a brands product, they are more likely to trust that brand. The 17th edition of Deloittes Digital Media Trends survey was fielded online in November 2022 among 2,020 U.S. consumers 14 and older.