A third of consumers use savings to cover the costs of media subscriptions
New data from KPMG reveals that nearly a third (29%) of people have borrowed money or used their savings to cover the costs of media subscriptions
New data from KPMG reveals that nearly a third (29%) of people have borrowed money
- New data from KPMG reveals that nearly a third (29%) of people have borrowed money or used their savings to cover the costs of media subscriptions since the beginning of 2022.
- 17% of consumers stopped subscribing to a video streaming service to pay for higher food bills this year.
- Over a third (35%) of respondents said that the number of subscriptions they pay for increased during the pandemic, but 64% are now cutting back because they are worried about the general increase in the cost of living.
Almost a third (29%) of individuals have struggled to pay for their media subscription services1 since the start of 2022, with people needing to borrow money or use savings to pay their bills according to new KPMG research. The survey of UK consumers conducted by OnePoll found that 15% have missed or defaulted on a payment for a media subscription service in the last three months.
Many media companies have also been affected by rising costs, which they have had to pass on to their customers. The data revealed that consumers have seen their bills for all media subscription services rise this year:
- 60% of people have seen their mobile phone bill increase
- 74% have had their TV subscription bill go up
- 68% are paying more for a video streaming service
- and 71% have seen a rise in cost of a music streaming service.
When asked why they are cancelling media subscriptions, nearly half (48%) said it was because the company put their prices up and it became too expensive.
The cost-of-living crisis is also having an impact: two-thirds of consumers (64%) said they are decreasing the number of media subscriptions they pay for because are worried about the general increase in the cost of living and want to save money. This was the primary reason given by all age groups.
Many people have stopped subscribing to some services to pay for higher food bills this year, which are expected to rise at a rate of 15% this summer, according to the Institute of Grocery Distribution2: 19% have sacrificed a video streaming service; 15% have ditched a TV provider; 14% have stopped paying for a music streaming platform and 15% have terminated a mobile contract due to increasing food prices.
Commenting on the findings Ian West, Head of TMT KPMG UK said:
“While consumers and media companies alike are feeling the pinch, organisations’ customers will value them in the long term if alternative payment options or plans can be introduced to help them continue to use their services – especially for essentials such as mobile. Unfortunately, the current crisis is unlikely to disappear anytime soon, and I hope that this industry adapts to support their customers in times of difficulty.”
Focusing on younger age groups, they were found to have the highest number of subscriptions and pay the most in total for their combined media subscription services:
- At the beginning of the year, 18–24-year-olds had on average 21 different media subscriptions whereas the over 65s had just 13.
- 19% of 18–24-year-olds are spending £151-£200 per month compared to just 3% of 55–64-year-olds and 5% of those over the age of 65.
- Therefore, this younger group is more exposed to fluctuations in prices which could explain why three quarters (74%) of 18–24-year-olds are planning to end a subscription in the next six months, while only 21% of those aged 55-64 and 32% of 65 and over think they will do so.
- Price hikes are hitting the youngest most: looking at mobile phone bills, 90% of those aged between 18-24 have seen their monthly bill go up this year, compared to just 39% of those in the 55-64 age bracket.
- With video streaming services, 90% of the 18-24 age group have seen an increase in their monthly payments, compared with 41% of 55–64-year-olds.
Reflecting on the data Linda Ellett, UK Head of Consumer Markets, Leisure & Retail, KPMG UK said:
“It is evident that younger age groups will cut back most on their media subscriptions. This can be partly attributed to the fact that they are likely to have a comparatively lower disposable income than other demographics, and typically exhibit less loyalty and more switching in other purchasing behaviours. It’s also evident that younger age groups have more subscriptions and were spending higher amounts in the first place, meaning they have greater flexibility in being able to make changes to save money.”
Other key findings include:
- Video streaming companies are most vulnerable to a drop in subscriber numbers, with over a fifth (22%) of consumers saying they will reduce the number of these services they pay for in the next six months.
- This figure was 18% for TV providers, 16% for music streaming and 14% for mobile.
- Analysing how much people are cutting back overall, 8% have reduced their monthly spend on media subscription services by £1-5; 18% have cut it by £6-10; 12% have cut back by £11-15 and 5% said they have reduced their bills by £16-20 per month.
West adds: “The dip in subscriber numbers seen so far is merely the tip of the iceberg. The data reveals that since the start of the year consumers are paying for roughly the same number of media subscription services, with the average number declining from 14.2 to 14 overall. Clearly, people haven’t scrapped too many services yet, but are likely to do so in earnest in the second half of 2022.”
- Ends -
- For the purposes of this research, media subscription services included: video streaming services, TV providers, music streaming services, mobile (e.g., SIM only plans), news outlet subscriptions and gaming streaming services.
The research was conducted by One Poll on behalf of KPMG UK, with 2,000 consumers being interviewed between 6th – 9th July, 2022.
About KPMG LLP
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff. The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.
KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
Lizzy Chesters – Media Relations Manager
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KPMG UK Media Relations Team: +44 (0) 207 694 8773