Subscription services have become an integral part of daily life, promising convenience, access, and value. From streaming the latest TV shows to having groceries delivered to your door, nearly every aspect of modern living comes with a subscription model attached.
At first glance, the costs seem manageable—$9.99 here, $7.99 there—but those small fees add up over time. Before long, you might find yourself asking, Is this really worth the cost? and more importantly, How can I take back control of my monthly expenses?
Let’s dive into how the subscription economy evolved, the hidden costs associated with it, and practical strategies to keep your finances in check.
The Rise of Streaming Services and Other Popular Subscriptions
Subscription services are hardly a new concept. Cable television, magazine deliveries, and gym memberships have used this model for decades. However, the advent of the internet brought a surge of new options that quickly became indispensable to consumers.
Netflix
Once upon a time, Netflix was an at-home video rental company. You would go onto their website and order a certain amount of DVDs you wanted, and they would ship it to you. There was no streaming service whatsoever.
Video streaming wasn't introduced until 2007, nine years after the website first launched. It was one of the first digital subscription services to offer access to television shows and movies.
As of 2021, Netflix has over 75 million app subscribers in the US and 13 million in the UK. Worldwide, that number was over 200 million in 2020.
Amazon Prime Video
Amazon Prime Video has over 50 million in the US alone. The market for global video streaming is predicted to grow by 23.2% between 2020 and 2025 according to the Media Streaming Market.
Other Popular Streaming Services
Since then, the model has been applied to various other industries. Music subscriptions started popping up, including but not limited to Spotify, Pandora, and Apple Music. You would also see fitness subscriptions and apps subscriptions become the norm.
Originally, you could stream music for free using websites like Pandora and Youtube. However, Spotify revolutionized streaming by partnering with artists directly. Even though there's still a free listening option, you unlock extra options if you subscribe to Premium.
Additionally, Spotify has partnered with other online tech companies to offer package deals. Purchase Spotify Premium and you also get access to Hulu and Showtime.
The problem with all of these digital subscription services is that an increasing number of companies have adopted the model to make a profit. Now, there are many different offerings that serve the same purpose.
For Netflix in particular, this meant that popular television shows and movies were getting taken down and moved to another, separate subscription service. If it was something you liked to watch, you'd now have to pay another company for access to it.
If you want to watch TV, just a few of your options are Netflix, Crave, Amazon Prime, Disney+, Peacock, Showtime, and HBO Max. Assuming they cost $5 each, you're looking at $40 a month, not including the costs of your other subscriptions.
As a result, a lot of people subscribe to multiple websites at the same time. Although video streaming websites may have original content to differentiate themselves, not all subscription services can say the same.
Spotify, Apple Music, and Youtube Music are all music subscriptions that offer access to your favourite artists and albums. However, they all offer the same artists and albums. There's very little reason to subscribe to more than one at a time, and yet millennials have been shown to do so.
The influx of streaming services has also resulted in unique models getting pushed, like Philo. For $20 a month, you get over 60 television channels available for streaming. It simulates standard cable television without a cable subscription.
A Growing Problem: The Cost of Convenience
Subscription services are designed to feel affordable. Paying $10 a month seems easier to stomach than a one-time $120 annual payment—but this strategy can lead to overspending.
Consider the cost of popular services in Canada:
- Netflix: Starting at $9.99/month.
- Amazon Prime: $7.99/month (or $12.99/month for the full membership).
- YouTube Premium: $11.99/month for ad-free content.
Now add in additional subscriptions for music, fitness, apps, and groceries. You could easily spend $60 or more per month on services—over $700 annually—just for basic access.
Ironically, many Canadians originally turned to streaming services to save money compared to cable TV. However, with the average Canadian paying $50/month for cable, streaming services can cost just as much—or more—when you subscribe to multiple platforms.
Subscription Saturation: Too Many Options
One significant issue with the subscription economy is redundancy. Many platforms offer similar content, leaving consumers to decide between services that aren’t drastically different.
For instance:
- Video streaming platforms like Netflix, Amazon Prime, Disney+, HBO Max, and Crave each offer exclusive shows. Keeping up with your favorite series across these platforms means juggling several subscriptions.
- Music subscriptions such as Spotify, Apple Music, and YouTube Music all give access to the same artists and albums. There’s little reason to subscribe to multiple services simultaneously, yet studies show some millennials do exactly that.
Adding to the issue is competition among streaming services. Popular shows frequently move from one platform to another, forcing viewers to subscribe to additional services to access specific content. For example, Netflix users lost access to Friends and The Office when those shows were moved to HBO Max and Peacock, respectively.
The Hidden Danger of Automatic Renewals
A defining feature of subscription services is their use of automatic renewals, which ensures that fees are charged monthly until the user cancels. While convenient, this can catch people off guard.
For instance, many users sign up for free trials without realizing that the subscription will automatically renew at full price when the trial ends. Others keep paying for services they no longer use because the payments are small enough to avoid attention.
Paying monthly rather than annually also seems less daunting, even though it often costs more in the long run. For instance, a $10/month service totals $120 annually—yet users are more likely to choose the monthly option to avoid a larger upfront cost.
How to Regain Control of Your Subscription Budget
Audit Your Subscriptions Take stock of every subscription you currently have. Are there services you rarely use? If you subscribed to Disney+ solely for Marvel shows, consider canceling when there’s no new content to watch.
Set a Budget Create a dedicated budget for subscriptions. Prioritize the services you use most and eliminate redundant or low-priority ones.
Take Advantage of Free Trials Many platforms, like Crave, offer free trials to attract new users. Use these offers to test a service before committing long-term—but remember to cancel before the trial ends to avoid unexpected charges.
Switch to Annual Payments If you can afford it upfront, opt for annual billing. These plans often come with discounts, saving you money over time.
Share Accounts Many platforms allow multiple users under one account. Share subscriptions with friends or family to split costs. For example, Netflix Premium supports up to four users at $17.99/month—only $4.50 per person if split evenly.
More Subscription Services FAQ's
Subscription services offer convenience, flexibility, and access to exclusive content or products. They cater to modern lifestyles by providing on-demand solutions for entertainment, fitness, and more.
Regularly review your subscriptions, cancel unused ones, and consider sharing accounts with family or friends. Opt for annual payments when possible to save money.
Free trials are a great way to test a service before committing. However, always set a reminder to cancel before the trial ends to avoid unexpected charges.
Prices vary, but platforms like Amazon Prime Video and Disney+ often have lower starting costs compared to others like Netflix or YouTube Premium.
Many services offer family or multi-user plans that allow account sharing. Be sure to check the terms of service to ensure compliance.
Use budgeting apps or subscription management tools to track your spending and receive reminders about renewal dates.
The Cost of Convenience
Subscription services undeniably offer value and convenience, making it easy to access entertainment, fitness programs, and other essentials. However, the hidden costs can quickly spiral out of control if left unchecked.
By evaluating your subscriptions, setting a budget, and making smarter financial choices, you can enjoy the benefits of the subscription economy without compromising your financial health. Remember, it’s not about giving up convenience—it’s about striking the right balance for your lifestyle.
