Life comes at you fast with online subscription services.
So much so, in fact, that a new study claims that about 40% of subscribers experience anxiety and fear in their everyday life without a subscription.
The data comes from Sure Payroll, a Paychex company. In the report, analysts note this 95% of Americans say they believe subscription-based business models “will become more important in the next few years, but consumer opinion on them is mixed.”
The report also found that 38% of subscription service companies say, “They are actually adding stress to their lives, rather than alleviating it.”
Too much hype about Netflix and ESPN+ monthly subscription fees? Not really.
According to C+R Research, consumers of subscription services are estimated to pay about $86 per month in subscription costs. Try again, the report found — actual monthly spend on subscription services is $219 — or $133 more than customers thought.
More than just money fueling consumer subscription fears
It’s not ideal to sign up for services you lose track of, but that’s exactly what happens to users of subscription services.
“Consumers are indulging in too many digital subscription services,” said Brian Greenberg, Insurist’s chief executive officer. “Studies have shown that the average consumer subscribes to five different digital services. That’s a lot of time and money being spent on things like music streaming, premium TV and online gaming.”
“When you add up all those subscriptions, the subscription experience can cost hundreds per month,” Greenberg added.
One concern is that most people don’t even use all of their subscriptions on a regular basis.
“It’s not uncommon for people to sign up for Netflix or Hulu but never actually watch anything on them because they’re too busy with life and other things that are going on in their lives,” Greenberg said. “This can lead to wasted money and time trying to figure out what shows are worth watching on these platforms when there is so much content available at any given time.”
America has reached the peak of subscriptions, other financial experts said.
“Every type of entertainment, from music on Spotify Premium and online content on The New York Times to streaming services on Netflix, seems to be becoming the new normal part of life for Americans, another $10-$100 for subscription services to pay,” said Fig Loan’s CEO Jeffrey Zhou. “On average, a consumer pays for 12 subscriptions, that’s too many.”
Another big problem is that they’re often marketed as one-and-done deals — when in reality they’re not.
“You sign up for a service, and that’s it — you don’t have to think about it again,” Greenberg said. “But that’s not always true. In fact, sometimes you have to sign up for more than one service to get the full experience.”
This scenario could be as simple as signing up for a free trial of Amazon Prime Video because you love watching on-demand movies, and then realizing you actually want to subscribe to Netflix so you can watch Stranger Things.
“But then you find out that in this case you can’t watch The Office anymore because NBC decided not to renew its contract with Netflix,” Greenberg said.
Fighting subscription service anxiety
Consumers dealing with countless ongoing subscription services not only need to keep an eye on payments and passwords, but also on the provider’s level of service. Simplify this whole process with some tips from consumer finance experts.
“If you have more than five subscription services, create a system to track all payments, passwords and the quality level of the providers’ services,” said Tobias Dankworth, Debt Bombshell’s chief technical officer. “This system could involve creating a document or spreadsheet listing all subscription services, the dates they started and ended, the amount paid, and the username and password for each service.”
Try a subscription tracking service like Rocket Money (formerly Truebill), Trim, or PocketGuard that can do the work for you.
Secure your passwords.
“Also, try to create a digital calendar that tells you when each subscription service needs to be renewed and when the last payment was made,” Dankworth added.
Unfortunately, most Americans don’t take password protection very seriously, resulting in repeated passwords for many or even all of their accounts. This can lead to confusion and potentially leave the user vulnerable to data theft.
“Ideally, you should have strong passwords that never repeat themselves, and you should change them frequently,” said Andy Kalmon, CEO of Benny. “I recommend using a secure password manager like 1Password to store them.”
One way to save money on subscription services is to share the same subscription service.
“This is probably the best way to drive down the cost of many subscriptions,” said Robin Duizings, iDigic’s director of marketing. “For streaming services like Netflix, Hulu, and Amazon Prime Video, you can share their Netflix account with a friend who is willing to share their Hulu subscription. This way you get the benefit of two subscriptions for the price of one.”
This step also helps avoid all the headaches and messy work of remembering multiple passwords.
“You only have to manage one account, which eliminates all the hassle of making multiple monthly payments,” Duizings said.