No, streaming TV doesn’t cost $1,000 per year

Here’s a collection of streaming video headlines from earlier this week:

• ZDNet: “The average US subscriber pays almost $1000 a year for streaming subscriptions”
• Independent: “Streaming services now cost average user more than cable TV, report reveals”
• iMore: “The average U.S. subscriber now spends nearly $1,000 a year on streaming — dismal state of subscriptions landscape laid bare in new survey”

What do all these stories about streaming costs have in common? They all cite the same survey from a digital payments firm called Bango, and they all got it completely wrong.

Bango’s survey is measuring all digital subscription spending, including news, fitness apps, online gaming, shipping services such as Amazon Prime, and delivery services such as Uber One. Streaming TV represents an unspecified fraction of Bango’s $77 per month figure. That didn’t stop ZDNet’s misleading headline from landing atop Reddit’s r/cordcutters forum and from being repeated almost verbatim across Cord Cutters News, Forbes, Tech Times, and 9to5Mac.

It’s a shame, because stories like these can end up scaring people away from what ought to be a sound financial decision. While I’m sure some folks do spend $1,000 per year on streaming services—hypothetically, one could spend a lot more—the average streaming bill is much lower.

The real cost of streaming

Instead of misinterpreting Bango’s survey on total subscription spending, let’s look at some surveys that estimated the cost of streaming video in particular:

• A Forbes survey updated in February 2024 found that Americans pay $46 per month for streaming on average, and that 81 percent have three subscriptions or fewer.
• A fall 2022 Deloitte survey pegged average U.S. streaming spending at $48 per month.
• J.D. Power’s July 2022 survey put streaming spending at $54 per month.
• The Motley Fool’s State of Streaming 2024 survey found that only 13 percent of respondents were spending more than $60 per month on streaming services.

Based on all this data, we can guestimate that the average American household spends about $600 per year on streaming services, hundreds of dollars less than the latest headlines would have you believe.

If your streaming TV bill’s a lot higher, it’s probably because you pay for a live TV streaming service such as YouTube TV or Hulu + Live TV, which are essentially drop-in replacements for a big cable bundle. Even then, you’re saving money—J.D. Power found that live TV streaming services cost $69 per month on average, versus $113 per month for cable or satellite—though a growing number of homes aren’t paying for any bundle at all.

Getting it wrong again

This is hardly the first time that media outlets have howled about the high cost of streaming without looking too closely at the data. We just went through this last August, when Financial Times claimed that a “basket of the top US streaming services” would soon cost $87 per month, versus $83 per month for a typical cable bill.

It turned out that FT based its cable estimate on a flawed study that only counted promotional rates and didn’t factor in exorbitant broadcast TV fees, regional sports fees, DVR fees, or equipment rentals. FT also inflated its model streaming bill in a variety of ways, for instance by excluding ad-supported options and adding up the full prices for Disney+ and Hulu, even though they’re much cheaper when bundled together.

None of this stopped a slew of publications from repeating Financial Times’ claims without qualification, including The Verge, Morning Brew, Tom’s Guide, and 9to5Mac (which even repeated the same figures in its latest story).

These stories take hold because there’s a kind of truthiness to them. We all know that streaming services are getting worse by raising ad-free prices, introducing new viewing restrictions, pushing viewers toward ad-supported tiers, and turning video quality into an upsell. The idea that this all results in runaway spending is an easy story to write (especially if you ignore the bigger price hikes on the cable side).

Yet these stories never seem to account for pushback from consumers, who are dropping their bloated bundles, cutting back on unnecessary subscriptions, and moving more of their viewing over to free streaming services. The aforementioned Motley Fool survey found that viewers are less willing than they were two years ago to pay more than $60 per month for video streaming, and even the Bango study noted that 57 percent of consumers have recently cancelled a subscription (streaming or otherwise) due to price hikes.

But maybe I shouldn’t complain. People have been saying that cord-cutting isn’t worth it for close to a decade now, and while it’s frustrating to see as someone who’s been helping folks save money this whole time, at least it’s given me plenty to write about.

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