In my lifetime, I’ve seen a major shift in how we watch television. In the beginning there were only three networks—CBS, NBC and ABC. Their programing was broadcast over-the-air and the quality of the picture depended on what the weather was like. All three were advertiser-supported. We had to sit through commercials or time a trip the bathroom just right so we were back on the couch before the show continued.
Then along came cable TV. Wow! You paid a monthly fee for a great-looking picture and a lot more channels to choose from. But as time went on, cable got carried away with itself and began raising prices—$120 per month, $150, $250 and higher. Besides the good stuff, cable subscriptions contained a bunch of garbage channels. You couldn’t pick and choose. You had to pay for it all.
When the internet became robust enough to stream quality video, people, fed up with high cable prices, cut the cord and began signing up for subscription services, paying a monthly fee for what they wanted, not what some ivory tower cable company said you had to have.
But as much as things change, they stay the same. Just like the old days when cable companies kept pushing their prices into the atmosphere, now subscription services are doing the same thing, and you’re probably paying more for subscription services than you realize. Just like the old days when you paid cable companies for things you didn’t want, today you’re probably paying for subscriptions you don’t use.
In 2021, the consulting firm West Monroe surveyed thousands of Americans asking them, “How much they spend each month on subscriptions.” The average answer was $62. But when they were given more time to think about it, the estimate went to $96. In reality, Americans spend an average of $273 per month for subscription services.
Whether it’s because of inflation or we’re just becoming more savvy, Americans are paying more attention to the mountain of subscriptions they’ve signed up for. They’re cancelling ones they don’t need, don’t want or can’t afford. And they’re learning to turn a subscription on when there’s something they want to watch and then turn it off when they’re done. Look at these headlines:
Wall Street Journal
Americans Are Canceling More of Their Streaming Services
WPDE Television
Streaming services see rising churn as ‘serial cancelers’ seek value for money
Business Insider
More people are canceling their streaming services as companies like Netflix, Amazon, and Disney hike prices
Fortune
Streaming revolt: Customers turn their backs on Netflix, Hulu, and Prime amid skyrocketing prices, annoying ads, and unwatchable shows.
The National Football League just got a taste of the more savvy streaming public. According to sports writer Peter King, a partner of NBC, the NFL intentionally gave the January 13, 2024 AFC Wild Card game to Peacock, NBC’s paid streaming service. In King’s words, “The league believes over-the-top streaming services are the future of watching football.”
Well, that didn’t work out so well. According to Jimmy Traina with Sports Illustrated, the league likely lost 10 million to 12 million fans for the Dolphins-Chiefs contest by showing the game on Peacock outside Kansas City and Miami.
The Chiefs-Dolphins game had the lowest Wild Card Weekend ratings. The Browns-Texans matchup received six million more viewers than the prime-time matchup in Kansas City.
The ratings were best on Sunday with broadcasts on national TV. The second-lowest ratings should make the league question its strategy of forcing fans into buying streaming services in the current market. The Buccaneers-Eagles game on ESPN, a cable network, had the second-lowest ratings of the weekend.
Several services are using bundling to pull you further down the streaming rabbit hole. For example, you can get a subscription to just Disney+. But if you want it commercial-free, you’ll pay about 60% more. But they entice you with a double premium bundle of Disney+ and Hulu. Then there’s the triple premium bundle of Disney + with no ads, Hulu with no ads and ESPN+ with ads.
The old CBS Access became Paramount+. Later they raised the price, but added Showtime to make you think the price increase was a good thing.
According to subscription-analytics provider Antenna, data from November 2023 shows that almost 25% of subscribers to major streamers like Apple TV+, Discovery+, Disney+, Hulu, Max, Netflix, Paramount+, Peacock, and Starz canceled at least three services in the past two years, and the monthly churn rate hit 6.3%, up from 5.1% the year before.
Americans are spending billions of dollars on subscription services because they have short memories, and that’s what subscription services are counting on. You may have subscribed to see a particular event and forgot to cancel after that. Or you signed up for a free trial and forgot to cancel. Or, cancelling is too much of a hassle and $5.99 or $9.99 a month isn’t that big a deal to you. It happens.
We’ve had a couple of instances like that at our house. I was looking at my Amazon Prime subscriptions and saw that we’d subscribed to Peacock. Neither my wife or I could remember why. That one is now gone.
We have a series we enjoy on Acorn. Normally we cancel after we’ve seen all the episodes. But we forgot. A year later it was time to subscribe for the new season. We were still subscribed. We’d been paying for months for something we didn’t use. Our experience is the same as millions of others.
The National Bureau of Economic Research has been studying this subscription phenomenon.
They discovered that getting a new credit card is one of the rare times you have to renew your automatically renewing subscriptions, since you have to update the payment information on file with those companies. In those months when credit cards are replaced, there is “a sharp, abnormal drop” in subscription retention. In normal months, subscription services lost 2% of subscribers. In the months a card was replaced, the streaming services lost 8%. But because we have short attention spans, subscription services benefit from subscriber inattention.
How do you fix the problem of having subscriptions you don’t want or don’t use? One idea is having the subscription companies ask how often you want to renew—once a month, once a year? It would be a default question you’re asked at the time you subscribe.
Netflix already does something similar. They ask inactive members who haven’t watched the service in a long time if they want to keep their accounts. If there’s no response, Netflix cancels the subscriptions. It’s like when Netflix asks if you’re still watching when you’ve fallen asleep on the couch.
It’s understandable that subscription services might be reluctant to adopt a good Samaritan approach with their customers. “After all,” they may say, “It’s the customer’s responsibility to keep track of their subscriptions. We’re providing the service. They should tell us if they don’t want it anymore.”
However, the Federal Trade Commission doesn’t see it that way. The FTC recently proposed a new rule that would require most companies to provide annual subscription reminders. But until that happens, the responsibility for keeping or canceling your subscriptions falls on you alone.
But we live in a world of technology where’s an app for everything. And yes, there are automated services that identify and cancel your subscriptions. Rocket Money gets a boost every January when people make New Year’s resolutions to get smarter about subscription maintenance. There’s a free version of the app, but to access premium features, you have to spring for a monthly… subscription.
Yep. Signing up for one more subscription may help you bring your subscription pile down to a manageable size.
