Household spending on streaming is going down

American consumers are spending less on a lot of things. Add streaming to the list.

Streaming subscription spending in US internet-connected households dropped by 25% in two years. Users now spend an average of $73 a month on streaming, compared to $90 a month in 2021, according to recent data from the research firm Parks Associates, which conducts surveys of 10,000 US internet households each quarter.

At the same time, one-third of these households used at least one free ad-supported service by the end of 2022, Parks Associates found, marking the fourth year in a row that free ad-based services have seen market-share growth.

Cost of business: The decline in subscription spending comes as streaming services continue to raise their prices across the board in an effort to better monetize their services (and, in some cases, direct users toward ad-supported offerings). Apple TV+, Disney+, Max, Peacock, and Paramount+ have all raised their prices recently, and just this week, Warner Bros. Discovery announced an add-on for Max subscribers centered on live sports programming.

Sad on ads: While overall usage of ad-supported services is on the rise, users aren’t exactly jumping for joy about the experience. More than 40% of ad-based OTT service users said there were “far too many ads,” and a higher percentage said they thought ads were too often not relevant to them, Parks Associates found. With that said, many free ad-supported services still have more competitive CPMs compared to subscription streaming services with ad tiers.

The even smaller screen: Mobile video viewing, which accounts for nearly one-fifth of all video consumption hours, is “dominant” among younger consumers, while TV viewership is waning: Less than half of 18- to 24-year-olds watched any video on a TV over a 30-day period.