Younger viewers are finding themselves in a difficult spot. Due to the rising cost of living caused by inflation, Gen Z and millennial audiences are increasingly being forced to choose between streaming video subscriptions and buying essentials like gas and groceries. According to a survey from Deloitte, 32% of millennial subscribers and 30% of Gen Z-ers have canceled at least one paid entertainment subscription within the past six months in order to save money. The survey also found that 44% of all respondents have canceled one or more subscriptions in the past six months. This is the highest rate that Deloitte has recorded in five years.
Kevin Westcott, vice chair of Deloitte’s US technology, media, and telecommunications practice, explains that it is becoming increasingly difficult for people to pay for both entertainment and essentials. As people are spending more on gasoline and groceries, they’re forced to cut back on entertainment services. Interviews with consumers paint a picture of young people having to choose between a few episodes of their favorite shows and spending on vital needs like transport and food.
According to the survey, 88% of households still pay for a streaming video subscription, but the growing amount of subscription cancellations could put pressure on streamers to demonstrate that viewership is still increasing. Deloitte found that millennials exhibited the greatest amount of churn, with 62% having canceled at least one paid subscription in the past six months. Gen Z-ers followed with a 57% churn rate. Older viewers, however, appear to be stickier clients, with 43% of Gen X-ers and 24% of both boomers and mature individuals canceling subscriptions.
In an attempt to attract new users and create new revenue streams, streamers like Netflix and Disney+ have both introduced ad-supported options that cost less than their ad-free versions. However, experts have suggested that these cheaper versions have caused some younger consumers to switch services rather than paying for pricier tiers. The survey also indicated that older viewers are more likely to keep their ad-free subscriptions, while younger viewers were more likely to trade them for the ad-supported ones.
In addition, a separate 2022 J.D. Power survey revealed that consumer fatigue with streaming fees and content is increasing, and Diesel Labs’ analysis of Twitter revealed a 17% increase in tweets referencing canceling or intending to cancel a streaming video subscription between 2021 and 2022, with Gen Z comprising 30% of the tweets.
Regarding the company and person mentioned in the original article, Deloitte is a global consulting firm headquartered in New York that provides services in audit and assurance, consulting, tax, financial advisory, and technology services, among other areas. Jaylon McMiller is a 27-year-old HR professional from Little Rock, Arkansas, who opted to cut his Netflix and Hulu subscriptions in order to make ends meet.
