A third of consumers borrow money or use their savings to cover media subscription costs in the UK: KPMG

Mumbai: KPMG statistics reveal that almost a third (29%) of people have borrowed money or used their savings to cover the cost of media subscriptions since the start of 2022. 17% of consumers have stopped subscribe to a video streaming service to pay for higher food bills this year. More than a third (35%) of respondents said the number of subscriptions they paid for increased during the pandemic, but 64% are now reducing because they are concerned about the general increase in the cost of life.

Nearly a third (29%) of individuals have struggled to pay for their media subscription services since the start of 2022, with people needing to borrow money or use their savings to pay their bills , according to a new KPMG study. The UK consumer survey conducted by OnePoll found that 15% of them have defaulted 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 increase this year. 60% of people have seen their mobile phone bills increase. 74% saw their TV subscription bill increase; 68% pay more for a video streaming service; and 71% saw an increase in the cost of a music streaming service.

When asked why they cancel media subscriptions, almost half (48%) said it was because the company had raised prices and it had become too expensive.

The cost of living crisis is also having an impact: two-thirds of consumers (64%) say they are cutting the number of media subscriptions they pay for because they are worried about the general increase in cost of living and want to save money. This was the main reason cited by all age groups.

Many people have stopped subscribing to certain services to pay higher food bills this year, which are expected to rise at a rate of 15% this summer, according to the Institute of Grocery Distribution2: Due to rising food prices , 19% quit a video streaming service, 15% quit a TV provider, 14% stopped paying for a music streaming platform, and 15% canceled a mobile phone contract.

Ian West, Head of TMT at KPMG UK, said: “While consumers and media companies are feeling the pinch, organizations’ customers will appreciate them in the long run if alternative payment options or plans can be introduced for them. help them continue to use their services – especially for essentials such as mobile phones. Unfortunately, the current crisis is unlikely to go away any time soon, and I hope this industry adapts to support its customers through difficult times. »

Focusing on the younger age groups, it was found that they had the most subscriptions and paid the most in total for their media subscription services combined:

At the start of the year, 18-24 year olds had an average of 21 different media subscriptions, while the over 65s had just 13.

19% of 18-24 year olds spend £151-200 a month, compared to just 3% of 55-64 year olds and 5% of over 65s.

As a result, this younger group is more exposed to price fluctuations, which could explain why three quarters (74%) of 18-24 year olds plan to end a subscription in the next six months, while only 21% of those aged 55 to 64 and 32% of those aged 65 and over think they will.

Price increases disproportionately affect young people; in the case of mobile phone bills, 90% of 18-24 year olds saw their monthly bill increase this year, compared to 39% of 55-64 year olds.

With video streaming services, 90% of 18-24 year olds have seen their monthly payments increase, compared to 41% of 55-64 year olds.

Linda Ellett, Head of Consumer Markets, Leisure and Retail at KPMG UK, said: “It is evident that younger age groups will reduce their media subscriptions the most. to the fact that they likely have comparatively lower disposable income than other demographic groups, and generally exhibit less loyalty and more changes in other shopping behaviors.It is also evident that age groups Younger people have more subscriptions and were spending higher amounts in the first place, which means they have more flexibility to be able to make changes to save money.”

Other key findings include:

Video streaming companies are the most vulnerable to a drop in subscriber numbers, with more than a fifth (22%) of consumers saying they will reduce the number of these services they pay for over the next six months .

This figure was 18% for television providers, 16% for music streaming and 14% for mobile phones.

Analyzing how many people are cutting overall, 8% reduced their monthly spend on media subscription services by £1-5; 18% reduced it by £6-10; 12% reduced from £11 to £15; and 5% said they cut their bills by £16-20 a month.

West added, “The decline in subscriber numbers seen so far is just the tip of the iceberg. The data reveals that since the start of the year, consumers have paid for roughly the same number of media subscription services, with the average number dropping from 14.2 to 14 overall. Obviously people haven’t cut too many services yet, but they will probably do so in earnest in the second half of 2022.”

Comments are closed.