Consumers Still Buying as Streamflation Soars

Consumers are still subscribing to streaming services despite soaring prices, with the average U.S. household now spending $60–$80 monthly on 3–5 platforms—up from $40–$50 a few years ago—and global users topping 1.5 billion, according to The Wall Street Journal.

Key drivers of price hikes include massive content costs ($100–$200 million per major series), Hollywood strikes, password-sharing crackdowns, and a shift from growth to profitability. 

In 2025 alone, Netflix raised its ad-free tier to $17.99 (+$3), Disney+ to $13.99 (+$3), and Max to $16.99 (+$2).Yet churn remains low because of addictive original shows, cheaper ad-supported tiers (used by nearly half of U.S. viewers), smart bundling (e.g., Disney+/Hulu/ESPN+ at $14.99), and a lack of viable alternatives—cable costs $100+ and free video lacks depth.

Supporting trends: Netflix’s ad tier grew 35% this year, bundles retain 20% more users, and 70% of households view streaming as a “non-essential necessity.” Analysts warn of a $100/month tipping point but see no slowdown while habit and content quality keep viewers hooked.

Wall Street Journal Graphic

Despite grumbling on forums like Reddit's r/cordcutters—where users report "churning" (cycling subscriptions) to save money—most stick around. Surveys show 70% of U.S. households subscribe to 3–5 services, viewing them as "non-essential but necessary" amid inflation.

Reasons include:

• Content Addiction and Habit: High-profile hits (The Bear, House of the Dragon) keep viewers hooked. As Northeastern marketing professor Yakov Bart notes, "Humans are creatures of habit"—people downgrade to ad tiers rather than cancel.
• Ad-Supported Options: Nearly half of U.S. viewers now use cheaper plans with commercials (e.g., Netflix's ad tier grew 35% in 2025). These generate higher revenue per user via ads, appealing to budget-conscious millennials and Gen Z, who blend streaming with free social media video.
• Bundling and Value Plays: Deals like Disney+/Hulu/ESPN+ ($14.99) or Verizon's 5G bundles reduce perceived costs. These have stemmed churn, with bundles retaining 20% more subscribers.
• No Better Alternatives: Traditional cable averages $100+/month with fewer on-demand perks. Free options (YouTube, TikTok) lack depth, and piracy is riskier post-crackdowns.

Analysts predict no end soon: "There’s no reason for companies to stop," says MoffettNathanson's Robert Fishman, as long as churn stays below 10%. However, if totals exceed $100/month, experts like SmartTech's Mark Vena warn of a tipping point, especially for younger users.