Consumers Are Clicking ‘Cancel’ on Subscriptions
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Here's your money briefing for Wednesday, April 12th. I'm J.R. Whelan for The Wall Street Journal. During the pandemic, Americans ramped up spending on subscriptions.
So the number of new subscriptions per user peaked in the third quarter of 2022. That means streaming services, digital memberships, food of the month clubs, etc., etc.
Now they're taking a closer look at their monthly spending and unsubscribing. We'll talk to Wall Street Journal reporter Rachel Wolf after the break.
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Your credit card bill likely has a recurring charge from a subscription you might have forgotten you even had. Now more Americans are taking a closer look at those charges and canceling their subscriptions. Wall Street Journal reporter Rachel Wolf joins us with more. Hey, Rachel, thanks for being with us.
How did subscription spending spike during the pandemic and when did it peak?
Thanks so much for having me on. So, Rachel, why have people built up so many subscriptions?
We really reached peak subscription during the pandemic when everybody was at home. Think streaming, think boxes of stuff delivered to your door. So the number of new subscriptions per user peaked in the third quarter of 2022. That means streaming services, digital memberships, food of the month clubs, et cetera, et cetera. Since then, cancellations are actually outpacing new subscriptions, according to financial planning app Rocket Money. So in other words, we've really reached peak subscription and now we're coming down off of a high.
So what's caused people to take a closer look at the money they're spending on subscriptions?
household budgets are getting a lot tighter. We have inflation, other economic uncertainties like a cooling job market. I spoke to one man in Ohio who's canceling subscriptions to all sorts of things to free up money for groceries so that he doesn't have to penny pinch at the grocery store by cutting satellite radio, magazines he never read, and going to restaurants instead of paying for a pricey membership fee. to a country club, he found that he's not actually having to cut back that much in other areas. So about a third of people who responded to a Credit Karma survey said that their biggest financial mistake last year was paying for services they never used, which I know I can relate to. But cancellations for premium streaming services in the U.S., which includes Netflix, Hulu, and HBO Max, were up 49% in 2022 from the previous year.
according to subscriber measurement company Antenna.
You know, a lot of us have recurring monthly fees we pay for various services. Why is it so easy for us to lose track of what we're paying for?
So a lot of people have their subscriptions sent to auto payment where they just have a little bit of money coming out of their accounts between going to get coffee or a donut, going out for drinks. Streaming service will just slip right in. But now people are really taking a closer look at their monthly spending and they're realizing they're paying about $133 more than they thought they were.
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