Latest / Inflation and Your Money with Fexingo: Protecting Purchasing Power and Beating Inflation / How Inflation Is Quietly Eating Your Streaming Subscriptions
Transcript
- Lucas: You know, Luna, I was looking at the July CPI print — 332.8, up another notch from June — and it got me thinking about something that's quietly eating more of my paycheck than groceries: my streaming bill. Luna: Oh, don't get me started. I just did a full audit and I found five subscriptions I forgot I was paying for. Lucas: Exactly. And here's the thing, the official inflation numbers are actually pretty tame right now — the ten-year breakeven is down to 2.24. But subscription prices are climbing way faster than that. The average household is now spending over ninety dollars a month on streaming services, up about forty percent in three years. Luna: Ninety dollars a month? That's over a thousand a year. And that's just streaming, not even cable. Lucas: Right. And what's interesting is that the CPI captures a lot of this, but it doesn't capture the quality-adjusted shrinkflation. You know, when you're paying two dollars more a month, but you're also getting ads now, or losing access to certain movies, or the 4K tier that used to be included is now a separate add-on. Luna: So you're paying more and getting less. That's the definition of inflation, but it's not showing up in the headline number. Lucas: Precisely. The Bureau of Labor Statistics tries to adjust for quality, but it's hard to measure a library of content that's constantly changing. So the real purchasing power erosion on your entertainment dollar is worse than the CPI suggests. Luna: I remember when Netflix was one price, no ads, and you could share your password with your whole family. Now it's, like, five tiers and they're coming after password sharing. Lucas: Yeah, that's a perfect example. Netflix started at around eight dollars a month for the standard plan back in the day. Now that same plan is over fifteen, and they've introduced a cheaper ad-supported tier that didn't exist before. So the effective price for a premium experience has gone up even more. Luna: And it's not just Netflix. Disney Plus, Max, Peacock — they've all raised prices in the last couple years. Some of them multiple times. Lucas: And the industry is doing this deliberately. They're pushing everyone toward bundles and ad-supported tiers because the subscription growth has stalled. The market's saturated. So they're looking for average revenue per user, and the easiest way to boost that is to raise prices and push people into higher tiers. Luna: But why do we put up with it? I mean, it's not like we need ten streaming services. We could just pick one or two. Lucas: That's the question, right? And that's what I want to dig into today. Because I think there's a real behavioral bias at play here. But also, there are some practical ways to fight back. Luna: Alright, let's hear it. Because I'm tired of getting these emails that say my subscription is going up another dollar fifty next month. Lucas: So first, let's talk about the scale of the problem. According to a recent survey, the average person has like four or five active streaming subscriptions. And most people drastically underestimate how much they're actually paying. When asked to guess their monthly spend, people say around forty dollars, but the actual average is closer to ninety. Luna: So we're all in denial. That's not surprising, it's like how people underestimate their credit card debt. Lucas: And the thing is, a lot of these subscriptions auto-renew, and they're small enough that you don't notice the charge. But they add up. And when you add in the price increases, it's like a slow leak in your budget. Luna: A slow leak, but one that's getting faster. And you know, I think there's also a psychological factor — we feel like we're getting a good deal because it's less than cable. But the total keeps creeping up. Lucas: That's a really good point. The comparison point for most people is the old cable bill, which was like a hundred fifty dollars a month. So anything less than that feels like a bargain. But the value proposition is changing. That comparison is shifting. Luna: So what do we do about it? I'm guessing the answer isn't just cancel everything and go back to antenna TV. Lucas: No, no. There's a smarter way. And it's actually a framework that I use with my own budget. It's called the 'one-in, one-out' rule. For every new streaming service you add, you have to cancel an existing one. Luna: That's a good rule. But what if you really want to keep all of them? I mean, I have my shows on Netflix, my kid's cartoons on Disney Plus, and I need Max for House of the Dragon. Lucas: Yeah, and that's the trap. We're loyal to specific shows, not platforms. But the platforms know that, and they exploit it. They have exclusive content that they know you can't get anywhere else. So you're stuck paying for the whole platform just to watch one show. Luna: And then that show ends, and you forget to cancel. That's how I ended up with three months of Apple TV Plus that I never watched. Lucas: Exactly. So the other thing you can do is set a calendar reminder. When you sign up for a free trial, put a reminder on your phone for the day before the trial ends. That way you can decide consciously whether to keep it or not. Luna: But that only works if you remember to actually cancel before the trial ends. I've been burned by that more than once. Lucas: Sure, but the reminder forces you to make a choice. You're not just letting it auto-renew out of inertia. And you can also use a subscription tracking app, or even just a simple spreadsheet to see exactly what you're paying for each month. Luna: I've tried those apps, but I always forget to update them. Maybe I should just go through my bank statement once a month and look for the recurring charges. Lucas: That's a good, low-tech solution. Once a month, pull up your bank or credit card statement, highlight all the recurring charges, and ask yourself: 'Did I use this service in the last thirty days?' If not, cancel it. You can always resubscribe later. Luna: And that brings up another thing — the churn. You know, I feel like I'm constantly subscribing and canceling. It's kind of a pain, but it does save money. Lucas: It's a bit of a hassle, but it's worth it. And it's actually a strategy that a lot of people are adopting. The streaming industry is seeing higher churn rates, but they're still winning because they're raising prices on the people who stay. Luna: So the real winners are the people who actively manage their subscriptions. The losers are the ones who just let everything auto-renew and never think about it. Lucas: And that's the behavioral bias I mentioned earlier. We're loss-averse, so we hate canceling because we feel like we're losing access to the content. But we don't feel the same pain when we're paying for something we don't use. It's a classic asymmetry. Luna: It's so true. I have a friend who pays for three different sports packages and he doesn't even like sports. He just forgets to cancel them. Lucas: Yeah, and that's money that could be going into an index fund. Over a year, ninety dollars a month is over a thousand dollars. That's a nice contribution to a Roth IRA, or a vacation. Luna: And that's the opportunity cost. It's not just about the money you're spending, it's about what that money could be doing for you if you invested it. Lucas: Right. And I want to be clear, I'm not saying cut out all entertainment. I'm just saying be intentional about it. And think about the quality-adjusted inflation. You're paying more for less, so you need to be sure you're actually getting value. Luna: I think that's the key takeaway. Be mindful, be proactive, and don't let inertia drain your wallet. Lucas: And that's the kind of thinking that helps you protect your purchasing power in an inflationary environment. It's not just about the big-ticket items; it's the small, recurring expenses that add up. Luna: So maybe we should do a challenge: both of us audit our streaming subscriptions this week and report back next episode. Lucas: I love it. That's a great idea. We'll hold each other accountable. And I'm sure we'll both find something to cut. Luna: I already know I'm going to find at least three things. And I'm looking forward to the extra cash. Lucas: Alright, so that's our plan. And if you're listening, we'd love to hear what you find in your own audit. You can reach us on social, but more importantly, let's get back to the numbers. Lucas: One more thing before we go: we are able to keep making these episodes ad-free because of a small group of listeners who chip in on Buy Me a Coffee. If you've ever gotten a useful tip from us, and you want to help us keep doing this, you can find us at buy me a coffee dot com slash fexingo. No pressure, but it honestly keeps the lights on here. Luna: And we mean that—it's completely listener-supported. We don't have a big network behind us. So even a few bucks a month helps us cover the editing costs and the coffee that fuels these episodes. Lucas: So, back to that subscription audit. We'll be doing ours this week, and we'll share what we found next episode. In the meantime, if you want to get a head start, just go through your bank statement today. You might be surprised. Luna: I already know I'll be surprised. Probably not in a good way. Lucas: But that's the first step. Acknowledging the leak. And then you can start plugging it. See you next time.