Top savings tips for streaming service price hikes

In 2023, many popular streaming services like Netflix (NFLX), Apple TV+ (AAPL), and Disney+ (DIS) raised their prices. According to a study from Deloitte, about 55% of Gen Z consumers would cancel their subscriptions to streaming services should the price increase by $5 a month.

Yahoo Finance Reporter Alexandra Canal joins Wealth! to break down the best ways for consumers to budget for the increasing costs of streaming services.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video Transcript

- Your streaming subscription bills have probably gotten more and more expensive over the last year. But how much is too much? A study from Deloitte showed 55% of Gen Z and 45% of millennial consumers would cancel their favorite subscription should the price get hiked by $5 a month. So, how can you best budget your favorite streaming products out there? Yahoo Finance's Alexandra Canal here to help us out here.

OK, so where are these costs rising to and let's get some budgeting tips later on.

ALEXANDRA CANAL: Of course. So we've all felt the pain of higher streaming prices, especially in 2023, we saw streaming platforms like Netflix, Peacock, Apple TV+, and Disney+, virtually all of your favorite streaming platforms hiked prices in 2023. We also saw cable replacement services like YouTube TV, Hulu Plus live TV raise their respective pricing. Both of those products are now more than 70 bucks a month.

And then in 2024, we've been hearing some reports that Spotify is going to be raising prices later this year. So when you add that all up, what do you get? The dreaded cable bundle of the past. It's just adding to our wallets. You mentioned that Deloitte survey, which also said that on average, US consumers subscribe to four streaming services and pay about $61 per month. On top of that, 68% of consumers surveyed paid for either a TV subscription or one of those cable replacement services.

So this is a heck of a lot of money. We have password sharing crackdowns across the board from companies like Netflix and Disney. Warner Brothers announced that they are going to be doing a password sharing crackdown soon. I was hit with the Netflix password sharing crackdown. I was one of those freeloaders on my parents' account.

- Yeah, many of us, yes.

ALEXANDRA CANAL: But because of that, I now subscribe to the more affordable, cheaper, ad supported plan for $6.99 a month. Now, this has been a goal of some of these companies. I do think that could be a tip if you want to save some bucks there. Yes, you have to watch ads. But a lot of these ad supported streaming services are significantly cheaper as you're seeing on your screen.

So that's one way how you could potentially help to improve the budgeting. There's also a lot of apps out there that track what you're spending on. You could probably take a look and see, OK, maybe I didn't watch a ton of Netflix over the past few months. Does this mean I should cancel the subscription?

And then, of course, there's always a good, you know, I'm just going to subscribe this month because a new season of Bridgerton is going to come out. I'm going to binge that. And then I'm going to cancel the subscription. And that's something known as churn, which is what a lot of these companies are trying to avoid. And that's why they're spending a lot of money on content to make sure that they have enough there to keep consumers on the platform so that they're not canceling and re-subscribing constantly.

- Yeah. There were some interesting findings within here, for sure. You laid out many of the key ones. And by the way, pinkies out for Bridgerton.

ALEXANDRA CANAL: Yeah, I'm so excited.

- Here was one interesting finding as well. Almost 50% of respondents said that they would spend more time on streaming video services if it was easier to find content. How often have you gone into Netflix or Hulu or HBO Max, whatever, and just said, man, I'm just trying to be inspired and find something that is relevant that I want to come back and binge all the time. But then you just get inundated with so many titles that you say, I'm just going to watch something that's old that I know that's going to make me happy for right now.

ALEXANDRA CANAL: The comfort shows.

- The comfort shows.

ALEXANDRA CANAL: Yes, I do think investing in technology and interface is very important for these companies. Netflix, I do think, does a good job with this because it will suggest different types of shows and movies that you maybe haven't seen, but based on what you previously watched that you could be interested in. And we're seeing a lot more investments in that space. YouTube TV does a really good job with that as well. They have the multiview feature, if you want to look at different sports products.

So technology in the interface experience, that is important. It's one thing that Warner Brothers Discovery also emphasized when they merged the Max and Discovery platforms. Because you're right, there are so much-- there's so much content available, I think, out there. And you can get very overwhelmed in trying to select what to watch. So if you have little things like the top 10 for Netflix, where you can see what's popular, what you could potentially like, I think that helps make the decision a lot easier.

- Ale Canal, thanks so much. You got your Master's green on.

ALEXANDRA CANAL: I do.

- Big day. Big day.