Australians value the presence of streaming services in their lives to the extent that many are choosing to cut back on other so-called essentials like groceries and socialising in favour of losing the subscriptions.

This is according to Deloitte’s Media Consumer Survey Report 2022, which found that when it comes to trimming household costs, getting rid of streaming services isn’t an option.

When asked which categories to chop if cost cutting, only 9 per cent placed digital media subscriptions at the top of their lists.

This is compared to the 30 per cent that nominated eating out, 27 per cent that would cut alcohol and tobacco spent, and the 12 per cent that would rather scrimp on groceries.

This is despite 64 per cent being concerned about the cumulative cost of multiple subscriptions, with the average household now spending $62 per month on streaming, up from $55 last year.

The average Australian house now has 3.1 subs, up from 2.3 last year. The average consumer is also spending 13 per cent above their target budgets for streaming, leading to the practice of switching between subscriptions.

46 per cent of SVOD users now periodically review subscriptions to decide whether to keep, add to or cancel existing services.

This is also leading to the growing adoption of ad-supported services.

There is a fair bit of social conditioning involved here, most notable when tracking trends between generations.

While 64 per cent of Gen Z and 61 per cent of Millennials are comfortable paying for entertainment to avoid ads, only 38 per cent of Gen X and 25 per cent of Boomers are willing to pay when there is an ad-supported, free model available.

Those used to TV being ‘free’, with the cost of advertising baked into the proposition, are happy for it to stay this way.

As Deloitte notes: “Interestingly, the impact of growing up in different ages of media consumption has produced clear generational divides when it comes to devices versus content.

“Gen Z and Millennials would more readily cut spending on electronics than their digital entertainment bundles, while all older generations would cut entertainment subscription costs before reducing their phone, laptop and TV budgets.”

Peter Corbett, Deloitte partner and national consulting leader for the firm’s technology, media and telecommunications advisory business, said Australians don’t see streaming services as mere discretionary spend.

“Australians do value the content they’re receiving and for the subscription media they do sign up for it’s a part of their lives.

“It’s not seen as discretionary as other costs might be. However, Australians will be influenced by how much they’re paying for it and the value they’re getting out of each subscription.

“We’re seeing that 31 per cent of respondents cancelled at least one subscription in the past six months. That is similar to numbers that we’ve seen in previous reports.”

Ad-supported tiers, while an effective means to counter cost-driven churn, won’t solve the split in audience attention across platforms, warns Deloitte.

“In fact, it’s likely to do the opposite as lower prices encourage consumers to grow their subscription stack even further,” the report reads.

“This move will also narrow the distinction in audience experience between BVOD and SVOD as the core differentiation of ad-free content erodes.”