JERICO, N.Y.—As media companies worry about the possibility of an upcoming recession and the problems that might create for their ad revenue in 2023, a new survey from PCH Consumer Insights highlights another major threat to the media ecosystem—the problem of cost conscious consumers canceling subscriptions.
The PCH Media’s Year of Living Dangerously report, which surveyed over 27,000 Americans, found that 93% of current media subscribers are at risk of moving, swapping or canceling their platform subscriptions each month with every billing cycle.
“Our research shows that subscription-based media platforms face a new era of uncertainty as consumers reassess their entertainment options each month,” said Smriti Sharma, head of consumer insights at Publishers Clearing House. “We are now living in an age of ‘nomading,’ where consumers are more willing to switch between subscriptions, pay more to get fewer ads, or pay less for more ads. Regardless of income or age, consumers are actively searching for ways to get the most out of their entertainment subscriptions.”
The survey comes at a time when major media platforms across all sectors are repacking offers, reducing pricing, and remodeling to maximize profit and explores consumer plans for their media subscriptions for audio, TV, gaming, sports and news in 2023.
One key finding was that only 7% percent of consumers who answered the survey intend to stay subscribed to their current media services on a month-to-month basis.
Additional significant findings include the following:
- Cutting Back to The Basics: Out of the over 27,000 survey responses, 30 percent of all consumers across all media say they intend to cut back to the bare necessities in the coming year. Even homes with household incomes of $150-249K are among those with the greatest likelihood of subscribing less and switching platforms.
- 1 in 10 Loyal Subscribers Still Making the Switch: Even among the most committed subscribers, only one in ten say they intend to stay with their current entertainment subscriptions this year. These consumers are still reassessing monthly, switching as needed, and cutting back to the necessities, even with a track record of platform loyalty. This leaves just seven percent of media subscribers in the safe zone for platform consumption.
- A Complicated Landscape with Free Services and Ad-Supported Tiers: Media consumers most willing to pay a premium to avoid ads are also the most likely to cancel and swap subscriptions monthly. More than a third say they will downgrade their subscriptions to pay less and get more ads. In contrast, 1 in 4 consumers now plan to spend more to see fewer ads in 2023. The arrival of cheaper, ad-supported tiers on premium platforms, combined with the recent rise of free services, seems to have complicated and accelerated the “nomading” of media subscriptions. Yet 41 percent indicate they will vary their payment preferences depending on the content they want to watch.
- Consumer “Attitudes” are fluid: With regards to advertising personalization, the complications continue. 35% of consumers say they dislike the use of their data to personalize ads, while 11% see ad personalization as a benefit to their experience. Yet 54% express no preference at all, demonstrating both a challenge and opportunity for those in the digital ad business.
All this adds up to the finding that America’s media subscription consumers do not see content choices as binary or simple, the researchers reported.
The data clearly shows today’s streaming subscribers are constantly, actively seeking better options. Regardless of which kind of content is streamed, which demographics services strive to serve, or which motivations move subscribers to sign-up, swap, or cancel, 93 percent of all media subscribers are now at risk with every billing cycle. In 2023, streamers and content platforms must get comfortable with complexity and meet the modern media consumer’s demands, the report concluded.