People are ‘borrowing or using savings’ to cover rising cost of media subscriptions
Nearly a third of people have borrowed money or used their savings to cover the costs of media subscriptions since the beginning of this year, new data from KPMG has revealed.
The accountancy firm also found that more than one in six UK consumers (17%) have stopped subscription to a video-streaming service to pay for higher food bills this year.
The results come on the eve of Netflix reporting its latest quarterly financial performance tomorrow (19 June). Wall Street analysts expect the streaming giant to report a second quarter of subscriber losses in a row, after it fell for the first time last quarter to 221.6 million.
KPMG’s research confirms that the current cost-of-living crisis is providing a corrective to the surge in streaming subscriptions that took hold during the Covid-19 pandemic when people spent more time at home.
Over a third (35%) of respondents said that the number of subscriptions they pay for increased during the pandemic, but nearly two-thirds (64%) are now cutting back because they are worried about the general increase in the cost of living.
Video streaming companies appear to be most vulnerable to a drop in subscriber numbers, with over a fifth (22%) of consumers surveyed claiming they will reduce the number of these services they pay for in the next six months.
This figure was 18% for TV providers, 16% for music streaming and 14% for mobile.
The survey, conducted by OnePoll, also found that 15% of people have missed or defaulted on a payment for a media subscription service in the last three months.
The data also revealed that consumers have seen their bills for all media subscription services rise this year:
- 60% of people have seen their mobile phone bill increase
- 74% have had their TV subscription bill go up
- 68% are paying more for a video streaming service
- 71% have seen a rise in cost of a music streaming service.
When asked how much they are cutting back overall, 8% of consumers said they have reduced their monthly spend on media subscription services by £1-5; 18% have cut it by £6-10; 12% have cut back by £11-15 and 5% said they have reduced their bills by £16-20.
Ian West, head of technology media and communications at KPMG UK, said: “While consumers and media companies alike are feeling the pinch, organisations’ customers will value them in the long term if alternative payment options or plans can be introduced to help them continue to use their services — especially for essentials such as mobile.
“Unfortunately, the current crisis is unlikely to disappear anytime soon, and I hope that this industry adapts to support their customers in times of difficulty.” The Media Leader