We watch more cinema, more series, more movies. But economic circumstances also force us to review monthly expense invoices. At that time, 52% of Spaniards said they were surprised to see the money they allocate to monthly subscriptions, according to a recent report by the credit manager Intrum.
The surprise does not stop consumption in entertainment. The latest TV-OTT barometer from the audiovisual and digital consultancy Barlovento Comunicación shows that eight out of every ten Spaniards, that is, 29 million users, accessed an average of three streaming service platforms in the third quarter. Prime Video is the favorite in Spain, where more than half of those surveyed by the consulting firm have access. Netflix follows very closely, with 46.1% penetration, Disney Plus (31%), HBO (23.5%) and Movistar Plus (23.5%).
On average, a person spends 37 euros per month on subscriptions to these services, although in the case of people over 65 years of age it increases to 49 euros. “Making a monthly purchase of fifty a month may not seem like a high number, but in reality it involves being subscribed to four or five video platforms. Do we have that much time for leisure?” asks Andrea Noceda, audience analyst and consultant. of Windward.
More and more companies are adopting subscription-based business models. This is a way of marketing services or products in exchange for a fixed amount of money, where by paying a fee (monthly, quarterly, annually) you buy the right to receive a product or consume a service in a certain time.
For industries, incorporating this model is an effective strategy to increase revenue, build customer loyalty, and stay relevant in a highly competitive market. It also offers the possibility of measuring the behavior of subscribers and making the offer more effective. Thus, the abandonment rate is lower than in the traditional business: when the customer subscribes they are more committed to the brand and have less incentive to look for alternatives.
The client also benefits from this model. “It is more convenient, the worry about going in search of that service every month disappears and it allows for greater organization in the management of expenses,” explains Antoni Cunyat, professor of Economics and Business at the UOC. It also allows for the democratization of some more expensive products. “Many sectors of the population would not be able to afford a next-generation iPhone if it were not for flexible payments,” he recalls.
The vast majority of media and audiovisual platforms promote the subscription model, while users are also increasing their number. But everything has a limit.
The consumer is beginning to consider that they have too many subscriptions and, if the economic situation is tight, unnecessary recurring expenses become significant. This is what is known as “subscription fatigue.”
“Fatigue occurs precisely when a review of the invoices is carried out and one realizes that an outlay is greater than the benefits obtained for that product. He balances the time of use and the money invested and the result he obtains does not convince him,” explains the UOC professor.
The situation with streaming services follows this direction. “This is the wave, since we have been recording, in which fewer people access paid content. For example, Netflix has been experiencing a drop in subscriptions for months. 48.7% of the registered cancellations on the platform have been motivated by the increase in spending on subscriptions” they mention from Barlovento. “The casualties due to inactivity also stand out. In the case of HBO, 46.8% of the cancellations were because they no longer used the platform with the same frequency. In the case of Amazon Prime Video, this reason is repeated in 31.9% of cases,” he details.
At first glance, subscriptions to streaming platforms do not entail a very high financial expense. But this coexists with the fact that half of Spaniards receive a negative surprise when they see the money they allocate to these services when they do the numbers. The credit manager Intrum explains that the digital economy would be related to accumulated expenses, often unconsciously. Do we spend too much on leisure?
Cunyat recognizes that there is no fixed percentage that should be allocated to the entertainment business since it will depend on economic circumstances. Now, an intelligent disbursement would always have to be made.
“When you go to buy some shoes, a live economic transaction occurs, thus being more aware of that loss of money,” he gives as an example. With the subscription economy, the dialogue with the company takes place only once. “You subscribe at the time of purchase and forget about having to actively make more payments. The renewal is automatic, and so is the debit to the bank account. Many consumers forget about that subscription.”
The situation leads to sleeping subscribers. “On the one hand, we access a greater number of platforms, but there is also a greater number of cancellations due to inactivity. It shows that there is fatigue due to excess subscriptions.” Noceda relates.
Experts insist on the need to constantly evaluate the use they give to the services for which they pay. Which ones are used each month? Which ones are used occasionally? “It is not necessary to be subscribed to all the companies. We do not have enough time to enjoy them,” concludes the analyst.
