Cost of living is squeezing the entertainment budgets of Australians

By AdNews | 20 November 2023

Inflation and the rising cost of living are prompting price-sensitive consumers to review their entertainment spend as years of consistent growth, according to Deloitte’s 2023 Media & Entertainment Consumer Insights.

Average monthly entertainment spend dropped for the first time in many years, down to $57 from $62 in 2022.

"This year we are seeing a combination of effects playing out – myriad entertainment options, household budget pressures, more discerning consumers and the effect of new business models changing the way Australians consume Media and Entertainment," says Deloitte's report author, Jeremy Smith.

"The shift to ad-supported video on demand (AVOD) services is reshaping the landscape between paid and unpaid content, with an overlap of offerings from fully free to premium.

"Coupled with the continuous splintering of content and emerging services, most of us are now juggling countless subscriptions and grappling with how to navigate through the media maze.”

A third (34%) of the 2,000 surveyed said they were still spending more than their target budget per month, a slight increase from 31% in 2022.

While spending less, Australians also hold more subscriptions on average than last year.

This is likely explained by the transition to advertising supported (AVOD) offerings, cheaper subscription tiers or continued account sharing.

Consumers are taking an active role in managing their subscriptions, a trend that holds across most media categories.

About half of consumers within each category have made at least one change in the last six months (except for music, which is around a third).

Across most categories, only 2% to 6% have cancelled all their paid subscriptions within a category, indicating they are willing to pay for at least some content.

The number of changes consumers made to their subscription stacks is below 2022 levels, with SVOD the only exception.

This year-on-year difference is largest for news (64% made a change in 2022 versus 45% in 2023), followed by gaming (69% in 2022, 53% in 2023), sports (61% in 2022, 46% in 2023) and music (47% in 2022, 33% in 2023).

This is largely driven by consumers adding considerably fewer subscriptions in 2023, indicating the overall plateau in subscriptions and increasing price sensitivity.

deloitte media 2023 - subscription switching

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