Are Consumers Canceling Netflix and Other OTT Subscriptions Amid Rising Cost of Living?
As the cost of living continues to rise, a significant number of consumers in the UK and the US are reducing or completely eliminating their entertainment subscriptions, according to research conducted between May 2022 and March 2023. The study, which powered the relaunch of TechRadar, revealed that 50% of respondents in both countries have decided to cut back on services like Netflix and Spotify.
The research consisted of three separate surveys conducted in May 2022, September 2022, and March 2023, reports iMore. With the cost of living crisis and inflation on the rise, consumers are actively looking for ways to reduce expenses and find better value in the subscriptions they pay for.
Cutting back on digital subscriptions
When asked whether they would consider stopping or cutting back on entertainment subscriptions, such as Netflix, Spotify, Disney+, and Amazon Prime Video, 50% of respondents in both the UK and the US answered affirmatively. This indicates that half of all consumers are tightening their belts when it comes to digital subscriptions. The trend can be attributed to factors such as Netflix's crackdown on password sharing and the introduction of a cheaper ad-supported tier. Subscription fatigue has become prevalent, leading to a general inclination to cut down on digital subscriptions.
Interestingly, the research also highlighted that consumers are more likely to reduce spending on activities such as eating out or going to bars and pubs before putting planned tech purchases on hold or canceling them altogether. For TechRadar's core audience, which consists of technology enthusiasts, getting a good deal on tech products is considered more important than socializing or subscribing to streaming services.
Tech purchases take precedence
The survey conducted by TechRadar revealed that tech fans prioritize purchasing gadgets over subscribing to streaming services. In fact, when faced with the choice of saving money, 50% of tech fans would cut their streaming subscriptions, while only 21% would put their tech purchases on hold. This reveals the sense of consumer electronics and how they remain important even in the face of financial pressures.
The survey also reflected shifts in the priorities of tech shoppers over the past year. The popularity of TikTok and YouTube has led to a surge in camera purchases, which have now entered the top five most desired tech products among TechRadar readers. On the other hand, TVs, and tablets have become less desirable compared to the previous year.
The mobile phone market remains resilient, with a significant percentage of consumers planning to upgrade their phones and contracts within the next year. Despite inflation and the cost-of-living crisis, the allure of gadgets remains strong, as evidenced by the continued enthusiasm of tech shoppers.
Value and research matter
The research revealed that most tech fans prioritize value for money when buying a mobile phone contract rather than opting for the cheapest model available. This indicates that consumers are willing to invest in products that offer good value and meet their specific needs. Furthermore, the survey showed the growing importance of research in the purchasing process. The majority of respondents agreed that spending more time researching the right products has become crucial to ensure they make the most out of their money. TechRadar's data supports this finding, with an increase in traffic to their deals' content over the past year. Other studies have also shown that shoppers are dedicating more time to finding the best deals and browsing non-food products.