Americans More Than Tripled Subscription Service Spending Amid Social Distancing
May 14, 2020 10:28AM
By David Dykes
The coronavirus pandemic has drastically altered the way Americans spend money. In many cases, that has meant cutting back. But many consumers are spending more on subscription services.
A recent CompareCards survey found that 1 in 3 respondents purchased a new online subscription as they sheltered at home to reduce the spread of the virus as well as to entertain children after schools closed.
Among the key findings:
- 1 in 3 consumers purchased a new online subscription as a direct result of coronavirus-related circumstances, such as being stuck at home or for child-friendly entertainment.
- The top five most popular new subscriptions include streaming services like Netflix or Hulu (17 percent), Amazon Prime (15 percent), food/delivery services, such as Instacart (12 percent), magazines and newspapers (8 percent) and virtual exercise programs (8 percent).
- On average, consumers spent $192.30 on these new subscription services, and while some may be a one-time or annual fee (like Amazon Prime), many of the costs will recur monthly.
- The two biggest reasons Americans subscribed to new products or services are to entertain themselves (67 percent) and to entertain their children (41 percent) while stuck at home.
- Nearly 60 percent of parents of children under 18 purchased a new subscription.
Streaming subscriptions booming as people stay at home
Of those who purchased a new subscription, 67 percent said the main reason they did was for entertainment, and 41 percent said the main reason was to entertain their children.
- Amazon Prime was most popular among Gen Xers (27 percent recently signed up).
- A quarter of parents with young children at home signed up for a food delivery service.
- 35 percent of parents with young kids and 31 percent of Gen Xers signed up for a new streaming service.
Consumers' subscriptions helped reduce trips outside
When asked to select why they signed up for a new subscription, 39 percent of respondents said that they did to reduce having to leave the house to purchase necessities. Millennials led the pack with 43 percent saying so.
That seems to correlate with why Amazon Prime and food/delivery services were among the most popular new subscriptions, CompareCards says. And of all age groups, members of Gen X were most likely to subscribe to these services (27 percent for Amazon Prime and 20 percent for food/delivery), followed by millennials (19 percent for Amazon Prime and 16 percent for food/delivery).
Parents most likely to sign up for streaming, food delivery services
With rampant school and daycare closures, it's no surprise that 41 percent of survey respondents who got a new subscription said the main reason they signed up was to entertain their children, CompareCards says. Nearly 60 percent of those who are parents of children under 18 years old purchased a new subscription of some kind.
The three most popular new subscriptions reported for parents were:
- A streaming service (35 percent)
- Amazon Prime (33 percent)
- A food/delivery service (25 percent).
For all of these services, parents were more likely than the average respondent to sign up. Here's what the overall numbers looked like:
- A streaming service (17 percent)
- Amazon Prime (15 percent)
- A food/delivery service (12 percent).
"Cardholders who are thinking about adding a subscription should evaluate what their spending patterns look like right now," says Matt Schulz, chief credit analyst at CompareCards by LendingTree. "For example, staying at home more might mean you're saving on gas, but spending more on utilities. And if you are cooking more at home rather than dining out at restaurants, that could mean savings on dining but more dollars spent on buying groceries."