Inflation might be cooling off, but Americans are still spending more than ever before on at least one thing: subscriptions.
According to a survey conducted by CNET, the average US adult shells out $91 every month on subscription services. That adds up to $1,092 per year. For context, the median hourly wage is $23. According to the National Equity Atlas, at that rate, you would have to work more than 47 hours to afford your annual streaming costs.
CNET’s survey mirrors a research report released the month before by Bango, which concluded that the average US adult pays $924 on subscriptions every year. The report also found that the average American has 4.5 subscriptions.
Types of Subscriptions
Perhaps unsurprisingly, streaming services are the most popular type of subscription, according to CNET’s survey. Sixty percent of respondents reported paying for video streaming services in the year leading up to March 2024.
Streaming is followed by e-commerce, like Amazon Prime, at 37%; music at 35%; retailers, like Costco, at 27%; and food services at 22%. Less popular options included health and fitness subscriptions, software management tools, and financial apps.
More surprising, however, was just how many Americans aren’t sure exactly what they were paying for. Almost half of the respondents in CNET’s survey admitted that they had signed up to a subscription service’s free trial and then forgotten to purchase it. Younger respondents were more likely to have accidentally paid for a service. Some respondents reported doing this more than five times in a year.
Free trials that the user forgets about is a common tactic used by subscription sellers to maximize profits. Other techniques that have sparked public outcry include the recent crackdown on password sharing.
Subscription Creep
The rise in subscription costs — referred to as “subscription creep” — may be putting additional pressure on many people’s wallets. Over the last decade, many subscription services have increased in price faster than inflation.
Netflix, for example, debuted at $8 a month. As of August 2024, the premium option is $22.99 a month — almost a threefold increase — while the standard costs $15.49. For comparison, if that original $8 price kept pace with inflation, it would be worth just $12.14.
On the other hand, there are ways to cut down on these costs, which a majority of Americans are investigating and utilizing, according to CNET.
Cutting Costs
The so-called “streaming wars,” in which different providers battle for subscribers, often results in the appearance of deals, bundles, or cheaper alternatives. Taking advantage of these offers and options can result in significantly lower costs.
“There’s so many ways to get free streaming,” one Reddit user commented under a report on rising subscription costs. “It’s not even complex or difficult to do,” another agreed.
The rise in subscription costs also has to be put in context of what came before. Cable bills, which have been largely pushed out by streaming services, were infamously inflated.
Under an article reporting that the average American spent $924 annually on subscriptions, one Reddit user noted that the figure is “less than my cable bill was when I dropped it.” It would also “still be about 65% less than the average cable bill in NYC,” another commenter claims.
