Latest / Inflation Explained with Fexingo: CPI, Prices, and the Cost of Living for Everyday People / Why Your Netflix Bill Is Getting More Expensive Than CPI Says
Transcript
- Lucas: If you checked your credit card statement this month and saw Netflix charging you $23.99 a month, you are not alone. And that is up from $15.49 just three years ago. Luna: That's about a 55 percent increase since 2023. CPI for entertainment services over that same period? Up maybe 12 percent. Lucas: Right. And that gap is exactly what we want to dig into today. Because Netflix is not the only one. Disney Plus, Max, Peacock — they have all raised prices faster than the official inflation data would suggest. Luna: And the thing is, the Bureau of Labor Statistics does track streaming services in the CPI. But the way they do it, I think, understates what people are actually paying. Lucas: So let's talk about that. The CPI measures the price of a 'subscription to a streaming service.' But it's a broad category. They sample a basket of services, and they try to account for quality changes. Except here's the problem: when Netflix introduces an ad-supported tier for $6.99, that pulls the average down, even if most people are on the premium plan. Luna: So the CPI sees the new lower-priced option and thinks, 'oh, prices are stable.' But in reality, the premium tier is going up, and the ad tier is a downgrade for anyone who doesn't want ads. Lucas: Exactly. And then there's the password-sharing crackdown. Netflix effectively forced millions of people to either pay extra or get their own account. That's a price increase for the user, but it doesn't show up as a price hike in the CPI because it's a policy change, not a list price change. Luna: That's a sneaky one. And I saw a headline from CNBC this weekend about 'funflation' — the idea that staying in for entertainment is costing more than it used to. That's exactly what we're talking about. Lucas: Yeah, 'funflation' is a term that's been popping up. The article pointed out that your 'staycation' — ordering in, streaming a movie, maybe a cocktail kit — can now cost as much as going out used to. And a big driver is these streaming price increases. Luna: So what's driving the price hikes? I mean, Netflix added 8 million subscribers last quarter, their content spend is through the roof, they have to pay for all those shows. But is it purely cost-push, or are they just testing how much they can get away with? Lucas: It's a bit of both. The cost of producing content has gone up — actors' salaries, production costs, marketing. But also, the streaming market is maturing. The era of cheap growth is over. Netflix, Disney, Warner Bros. Discovery — they all need to show profitability now. So they are raising prices and trying to reduce churn. Luna: And the interesting thing is, the data shows that even with the price increases, churn is actually down. People are not canceling as much as analysts expected. Lucas: That's the 'Netflix effect' — the service has become so embedded in our routines that it's almost a utility. You might grumble about the price, but you don't actually cancel. And the same goes for Amazon Prime — which raised its price to $149 a year in 2025 — people just absorb it. Luna: But that means your personal inflation rate for entertainment could be way higher than the official number. And if you're already feeling squeezed by rent and groceries, this is another layer. Lucas: Right. And let's put some numbers on it. The CPI for 'subscription services' — which includes streaming, music, cloud storage — is up about 15 percent since 2023. But if you're a Netflix subscriber who got bumped from the basic to the standard plan, you're looking at a 55 percent increase. That's a huge gap. Luna: And the CPI doesn't capture the 'shrinkflation' aspect either. Netflix has been cutting content — fewer original movies, shorter seasons. So you're paying more for less. That's the definition of shrinkflation, but it's harder to measure. Lucas: That's a great point. And it's not just Netflix. Spotify raised prices by a dollar a month in 2024 and again in 2025. Apple Music, too. These are small numbers individually, but they add up across all your subscriptions. Luna: So what can the average person do? I mean, we're not going to tell people to cancel Netflix — it's a part of life now. But are there strategies? Lucas: One thing is to audit your subscriptions. A lot of people are paying for services they barely use. Or you can rotate — subscribe to one service for a month, binge, then switch. But that's a hassle. Another option is to use the ad-supported tiers. They are cheaper, but you're trading time for money. Luna: And the ad tiers are actually a good deal if you don't mind commercials. Netflix's ad tier is $6.99, Disney Plus is $7.99. Compared to the premium tiers, that's a big savings. Lucas: But the thing is, even the ad tiers are going up. Netflix's ad tier launched at $6.99 in 2022, and it's still $6.99. But Disney Plus's ad tier started at $7.99 in 2022, and it's now $9.99. So the lower end is creeping up, too. Luna: Yeah, and the ad tiers also mean you're paying with your data and attention. So nothing is truly cheap. Lucas: And that brings us back to the bigger picture. The CPI is a useful tool, but it's not your personal inflation gauge. If you want to know how much your cost of living is really going up, you have to track your own expenses. And for most people, the streaming category is a significant part of that. Luna: I think that's the key takeaway. The official numbers can be comforting, but they don't tell your story. And a show like this one, that helps people understand those gaps — it takes work to keep it going. Lucas: Yeah, and we love doing it. If walking through the economy with us has made something click for you, consider supporting the show. It's a couple of dollars a month — genuinely what keeps these going. Buy me a coffee dot com slash fexingo, if you've gotten something out of it. Luna: Yeah, we really appreciate it. And it helps us stay independent and ad-free. Lucas: Exactly. So back to the data: we are living in a world where the stock market is at records — S&P 500 at 7,575, Nasdaq at 26,282 — but many people feel like their purchasing power is eroding. And a big part of that is the cost of the digital services we rely on. Luna: And it's not just streaming. It's cloud storage, software subscriptions, even news. The subscription economy has a built-in inflation mechanism that CPI struggles to capture. Lucas: Right. So our advice: look at your own bank statements. Compare what you're paying now versus a year ago. That's your real inflation rate. And if it's higher than the official number, don't be surprised. You're not alone. Luna: And maybe consider rotating services or using ad tiers. Every dollar saved adds up. Lucas: That's it for this episode. Next time, we'll look at another corner of the economy where the CPI might be off. Until then, keep your eyes on your own wallet.