Survey: Consumers Will Cut Grocery Spending Before Streaming Budget; Ad-Supported Streaming Still the Future
Inflation has caused hard choices in essentially every household across the U.S. Although domestic inflation rates have not reached the heights they have in other countries around the globe, 60% of consumers say they’ve experienced an increase in monthly expenses in the last year, according to a report from the National Research Group.
That report took an in-depth look at exactly how inflation is affecting consumers across the country, and where they’re feeling the bite most deeply. Despite the fact that over 25% of customers have cut their pay-TV budget in the last six months, streaming providers have to be pretty satisfied with NRG’s data.
One point that the survey drives home repeatedly is that on the whole, customers are very satisfied with their streaming subscriptions, and are generally unwilling to give them up. The survey found that a whopping 94% of respondents said they were mostly or completely satisfied with their TV or movie streaming services. That level of satisfaction goes a long way toward explaining why only 18% of those surveyed said that they had been trimming their streaming budget to cope with inflation.
As the data shows, people were much more willing to cut back on their monthly food budget than they were to cut back on streaming services. This does not, of course, mean people would rather watch TV than eat, but it does show how much value people place on keeping themselves entertained, especially as other methods of entertainment continue to increase in price.
There were more encouraging numbers for streaming services in NRG’s research as well. The survey also showed that while 28% of consumers plan to cut their subscription services over the next six months, only 20% of those consumers plan to cut a TV or movie subscription. Dating apps and personal efficiency apps were most likely to be cut, with 76% and 66% of respondents saying those would be the first subscriptions to go.
Customers are finding ways to keep their streaming budget at reasonable levels. The report found that 24% of consumers admitted to using a streaming service paid for by somebody else. That may not be good news for companies like Netflix, which is experimenting with ways to crack down on password sharing, but the alternative may be losing those customers for good.
One way customers are saving that streamers will encourage is the bundling of subscriptions. Fifty-seven percent of customers with at least one subscription have purchased a streaming bundle. There may not be a cross-company mega bundle of services coming to market any time soon, but companies that want to take advantage of consumer trends should be looking for ways to increase their bundled offerings.
The survey also confirmed that the future of streaming is ad-supported as 53% of consumers report that they’re generally willing to stomach ads in return for a lower-priced product, and only 28% said that they’d pay more to avoid ads. A combined 81% of respondents said they’d be more likely to subscribe to a service with ads in the future than a high-priced service with no ads.
Inflation won’t last forever, but NRG’s report has implications for the streaming world that hold true no matter the economic conditions. Customer tastes in the streaming market are evolving, but loyalty to subscriptions is strong. Now it’s up to streamers to decide how they’ll adapt their product for the future in order to keep satisfaction levels high.