Latest / Inflation and Your Money with Fexingo: Protecting Purchasing Power and Beating Inflation / How Inflation Is Quietly Eating Your Streaming Service Value
Transcript
- Lucas: So the latest CPI reading came in at 334.0 for May, and core inflation — that's excluding food and energy — is up to 336.1. That's a slow grind higher, not a spike. But for anyone paying monthly streaming bills, the pinch has been anything but slow. Luna: Yeah, my own bill has crept up maybe 20 percent in the last couple years. And I keep asking myself — am I actually watching more? No. I'm watching about the same. Lucas: That's exactly the disconnect. Streaming services are raising prices well above the headline inflation rate. Netflix introduced its ad-supported tier in late 2022 at $6.99 a month. That same tier is now $11.99 — up over 70 percent in less than four years. The ad-free standard plan went from $15.49 to $18.99. Luna: And Disney+ had its ad-tier launch at $7.99. Now it's $9.99, and the ad-free version is $15.99. So it's not just one company — it's the whole industry. Lucas: Right. And the justification from the companies is always the same: we're investing in more content, production costs are up. But when you look at the actual cost per hour of viewing, it's getting worse for consumers. You're paying more for roughly the same library. Luna: I saw a recent study that said the average U.S. household now subscribes to about four streaming services, spending around $60 a month total. That's approaching what a cable bundle used to cost. Lucas: And that's where inflation is really eating your value — because that $60 doesn't buy the same experience it did in 2020. Back then you'd get ad-free access to massive catalogs. Now many of those catalogs have been stripped — content moves between services, libraries shrink. And on the ad tiers, you're watching commercials anyway. Luna: So what's the move? Cut back? Or just accept it as the new normal? Lucas: I think the smart play is to be more deliberate. Rotate subscriptions rather than stacking them. Watch what you want on one service for a month or two, then switch. That alone can save you 30 to 40 percent annually. Luna: Yeah, I've started doing that. I cancel everything except one or two at a time. It feels less wasteful. Lucas: And there's another angle: the ad-supported tiers may actually be a better deal than they seem — if you don't mind commercials. The price difference is often $5 to $7 a month per service. Over a year, that adds up. But you have to ask yourself whether your time and attention are worth that saving. Luna: For me, the ads bug me. But I know people who don't mind. It's a personal call. Lucas: Exactly. The broader point is that inflation is reshaping these markets. Companies are pushing toward higher revenue per user — through price increases, ad tiers, and password-sharing crackdowns. And consumers are responding by churning more, subscribing to fewer services, and being more price-sensitive. Luna: Speaking of which — you know, our conversations here on the show are ad-free by design. And that's something we hear listeners appreciate. If you find this kind of analysis useful — not just on streaming but on any personal finance angle — listener support is what keeps it that way. You can contribute at buy me a coffee dot com slash fexingo. Just a simple way to say thanks. Lucas: Yeah, it's a small gesture that directly helps us keep the show independent and focused on what matters to you. No pressure at all, but if you've gotten value, that's where to find us. Luna: Alright, back to streaming. So we're spending more, getting less. Is there any silver lining? Lucas: I think there is. The competition is fierce, which means services are still trying to win you back with better content and user experience. And the bundling trend — like the Disney+, Hulu, and ESPN+ package — can offer genuine savings if you actually use all three. So it's not all bad. But you have to stay active. Luna: Set a calendar reminder to review your subscriptions every quarter. I do it now. It takes ten minutes. Lucas: That's the kind of habit that protects your purchasing power over time. Because inflation isn't just about the big numbers you see on the news — it's in the monthly bills that quietly creep up. Streaming is a perfect example. Luna: And with core CPI still above 3 percent, the Fed's not likely to cut rates aggressively anytime soon. So these price increases aren't going away. Lucas: The ten-year breakeven inflation rate is 2.24 percent — that's the market's expectation for average inflation over the next decade. So even if the Fed gets inflation down, we're still looking at a higher baseline than the pre-pandemic era. Luna: Which means streaming services — and really all subscription businesses — have room to keep raising prices as long as consumers tolerate it. Lucas: Right. And the key word there is 'tolerate.' If enough people churn or downgrade, the pricing power weakens. That's the leverage consumers have. So being willing to cancel is your best defense. Luna: I cancelled my HBO Max when they raised the price and then split off Discovery content. I just didn't feel the value was there anymore. Lucas: And they've since merged and rebranded. The point is, voting with your wallet works. The streaming industry is still figuring out its long-term model. We're in a transition period. Luna: So bottom line: inflation is eating your streaming value, but you can fight back by being strategic. Rotate, bundle, and don't be afraid to cancel. Lucas: Exactly. And we'll keep tracking the numbers so you know when it's time to rethink your subscription stack. Thanks for listening.