Where Consumers Are Looking to Cut Entertainment Spending

The options for quality entertainment can feel endless. New streaming shows, big budget movies and superstar concerts are just a few of the options Americans have at their fingertips. But all those choices come with a cost, and despite inflation falling from record highs in the summer of 2022, consumers are still feeling pinched. 

Similar to last year, consumers continue to report cutting back more on one off expenses over most subscription services. But, they aren’t done trimming. Many consumers still have plans to tighten their entertainment budgets even further in the upcoming year, and saving on subscription services are among their highest priorities. 

Telecom price sensitivity is down from it’s peak, but rising

Morning Consult’s proprietary index tracking the prevalence of consumers walking away from purchases due to prices indicates that telecom (including internet, mobile plans and streaming subscriptions) price sensitivity is down from its peak in April of last year, but growing in recent months. 

This improvement is likely due to softer inflation helping support discretionary spending overall. However, core inflation remains stubbornly high, driven largely by services categories like rent and car insurance. The elevated cost of living continues to put pressure on household budgets, forcing consumers to make trade-offs with their discretionary spending. Many are prioritizing entertainment outside the home, like travel, rather than adding new telecom services.  

One-off entertainment purchases are first to go

While telecom and entertainment prices aren’t contributing much to the recent volatility of topline inflation, consumers have still decided to cut back or stop spending in these categories in the past year, likely to make more room in their budgets for higher prices of essential services, like rent. 

When asked specifically where they cut back or stopped spending in the past year on entertainment, the largest shares of consumers said one-off purchases like movie theater tickets and books. Looking at the data by net difference between those who cut spending and those who didn’t in a particular category also shows single use entertainment expenses most impacted, with a particular emphasis on gaming.  

U.S. adults were more likely to say they cut versus not cut their spending in the past year on every type of video game expense we asked about, including both one-off purchases and subscriptions.

Two areas the majority of adults aren’t cutting back? Internet and mobile phone plans. The largest shares of consumers said they didn’t cut back on these expenses, and the smallest shares of consumers also said they didn’t pay for these expenses.

Consumers aren’t done trying to save on a number of entertainment expenses

But that doesn’t mean consumers aren’t looking to find future savings. In fact, internet and phone plans are the top priorities for consumers looking to save on entertainment costs. Roughly 3 in 5 U.S. adults said it’s important to spend less on those categories in the next year. 

That goal could be tricky for consumers given internet and mobile phone plans are recurring expenses and major telecom companies, like AT&T and Verizon, have recently announced price increases to some of their plans.

Next on consumers’ list for cutbacks are a variety of subscription services, including video streaming, cable or satellite television and music. Streaming services become even more of a priority for the most prolific users. Over 3 in 5 (64%) of those with five or more streaming video services say it’s important to spend less on them in the next year, 13 points higher than U.S. adults. 

The inclination to cut may be due to more than just economic pressures. Streaming services used to be a great deal for their subscribers, but prices, and password restrictions, have changed. Netflix plans can now cost over $20 a month, an all-time high, and every other major streamer also implemented price hikes in 2023. In addition to raising prices, more streaming companies are looking to crack down on password sharing, which could bring them more revenue, but add yet another recurring entertainment expense to consumers’ budgets.