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Hulu to DoorDash: Why are more Americans slashing monthly subscriptions?
A new survey from CNET says nearly 6 in 10 US adults are thinking about canceling at least a few of their paid subscriptions.
Millions of Americans are cutting back on subscriptions from streaming platforms to food delivery apps as rising costs force households to rethink monthly expenses. A new CNET survey shows nearly 6 in 10 U.S. adults are planning to cancel at least some of their paid subscriptions, highlighting growing frustration with price hikes, hidden fees, and auto-renewing charges that often go unnoticed until bank statements tell a different story, as per USA Today report.
Marco Bertini, a marketing professor at Esade in Barcelona said, “When people’s budgets are tighter, they start asking themselves: Do I need to be paying over time for this? It just feels like a heavier burden.”
One couple in Arizona had enough. Cassandra Navarro, who lives in Scottsdale, Arizona, got tired of all the small bills stacking up. She canceled Hulu, Amazon Prime, and DoorDash earlier this year.
She says streaming services aren’t worth it anymore — they raise prices often and remove shows she liked. As for food and shopping, she’d rather go to Walmart or swing by to pick up her takeout instead of paying delivery fees.
Navarro and her husband have decided they’ll cut back even more once they settle into their new house. They plan to build a collection of CDs and DVDs instead of paying for digital access every month.
Navarro, 30 said, “It just all adds up so much. We don’t mind having one or two subscriptions, but when you have so many subscriptions at once, you start to feel like you don’t have control of your life anymore. … You can’t keep track of your own finances.”
How much American spends on subscription ?
According to the same CNET report, the average American spends more than $1,000 a year on subscription services and about $200 of that goes to stuff they don’t use or need anymore.
The reason so many companies push subscriptions is simple: it’s profitable. A Harvard Business School report says around 75% of direct-to-consumer companies offer a subscription option.
Bertini says this model works in certain industries, especially where the items are expensive. But not everything needs a recurring fee.
"There are some places where it makes sense, and some places where it doesn’t," he said. He also pointed out that some businesses rely on customers forgetting they're being charged every month.
That may backfire as people become more careful with their spending. U.S. retail sales dropped 0.9% in May and 0.1% in April, which points to growing caution among shoppers.
“Do I want to have a recurring expense when my disposable income is a bit fluctuating?” Bertini asked. “Disposable income, during tough times, is a little more uncertain. It may be higher one month, lower another, then maybe I’m unemployed.”
Experts says it takes effort to cancel subscription
Robbie Kellman McCarthy, an expert in consumer habits, says subscription-based companies may still do better than those that rely only on one-time purchases. He said, “It takes effort to cancel, where it takes no effort to not purchase."
He noted that during the Great Recession, some subscription services actually grew. Netflix, for example, saw a 26% rise in subscribers at the end of 2008, and another 31% jump the next year. Salesforce also saw more customers and more revenue.
Still, not all subscription models are created equal.
McCarthy said, “If you’re a utility like a telecom provider, (the risk is) probably pretty low.” He added, “If you start moving toward streaming services, I think the risk goes up. When you move toward a box subscription, the risk becomes pretty high.”
FTC wants to make canceling easier
One thing that could change the game for consumers is a rule from the Federal Trade Commission called “click to cancel.” This rule says companies should make canceling just as easy as signing up — no long phone calls, no hidden buttons.
If it took two clicks to subscribe, then it should take only two clicks to quit.
The rule was passed last year under former Democratic Chair Lina Khan, but it’s still not being enforced yet. Business groups have sued, saying it’s too much of a burden. And the current FTC Chair, Republican Andrew Ferguson, said he voted against it because it was pushed during a lame-duck period.
For now, the rule is on hold until July, to give companies more time to prepare.
But Khan stands by it. "I really hope that sticks because this is hurting people," she said on the Pablo Torre Finds Out podcast in June. "Nobody should be stuck paying for a subscription that they either never signed up for or want to cancel."
