The economy may not be officially in recession, at least not yet, but American consumers are already cutting back on entertainment spending, due in part to record-high inflation, and that includes spending on streaming service subscriptions.
According to a forthcoming study from the Variety Intelligence Platform, an excerpt of which Variety previewed this week, 38% of those surveyed “have begun making changes to spending on activities, such as attending concerts or going to the movies.”
Specifically, the “Entertainment in a Bear Market” report — which will be released in full on August 1 — found that 26% of those asked “have already made changes to their monthly entertainment subscriptions as a result of rising inflation.” And among those who call themselves concerned about the prospect of recession, 29% have “adjusted their spending on entertainment subscriptions,” while just 11% of those unconcerned have done so.
As the streaming industry enters earnings season, with companies preparing to update investors on their current subscriber totals over the next month, onlookers will soon learn whether or not those changes have begun to hit streamers in a meaningful way yet.
Just over half of survey respondents said that they would continue to pay for audio and video subscriptions if prices were raised, while 39% said they would consider canceling those subscriptions.
When respondents were asked what they would pull back on in the event of a recession, “eating out at restaurants” was the top choice at 67%, while “travel” and “recreation & entertainment” tied for second with 55% — “shopping” was right behind at 54% (respondents could give more than one answer.)
Also noted in the report was that entertainment spending has traditionally held up rather well in recessionary conditions.
“Hollywood hopes for the best for products that have already been tested in the pandemic era, including many streaming services that are only a few years old,” the report says.
The survey comes after Netflix announced earlier this year that it lost subscribers for the first time since 2011. The company will announce its second quarter numbers after the bell on Tuesday. It will be followed by earnings announcements for several other companies that own major streaming services, nearly all of which added subscribers in the first quarter even as Netflix lost them.