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Nearly a third of streaming subscribers added a new service during the pandemic, new poll shows

Sharing can be both a savings and a loss depending on how consumers play out their options

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While the coronavirus was streaming its way across the U.S., people quarantined at home bumped up their own streaming service subscriptions by 31 percent, according to a CreditCards.com poll.

According to a new study released on Monday, millennials drove the surge in March, April, and May -- the peak of the quarantine -- with 43 percent adding a service. Gen-Xers followed that lead with 33 percent adding a service, and 18 percent of baby boomers did the same. 

Compared to the pre-COVID months of January and February, the increase in subscriptions rose 54 percent overall. 

Sharing and saving

It’s no secret that subscribers share their subscriptions with others, but the extra stay-at-home time driven by the pandemic more than doubled that metric. 

Of the 81 percent of U.S. adults who subscribe to a streaming service, 52 percent shared an account with someone outside of their households in March, April, or May. Once again, millennials led the way with 63 percent admitting that they shared at least one account, compared with 51 percent of Gen-Xers and 36 percent of baby boomers.

There’s a hefty win-win when sharing takes place. Those who “borrow” streaming subscriptions say it saves them an average of $513 annually, according to a March survey from Bankrate. Nonetheless, Creditcards.com analyst Ted Rossman threw out the caution flag. 

“While we’ve all said for years that it would be great to only pay for what we want to watch, streaming can be expensive because the market is so fragmented,” he told ConsumerAffairs. “If you want to watch HBO programs you need their service, but if you want to catch up on old episodes of The Office or Friends you’ll need NBC’s offering. Then there are all of the Netflix exclusives, and maybe your kids really want Disney+.” 

“The point is, by the time you cobble together all of these competing plans, and perhaps pay for a souped-up internet subscription to support all of the bandwidth, it can add up to a lot of money. That’s why I think so many people are sharing services,” Rossman concluded.

Sharing services’ indifference

While Netflix’ terms and conditions spell it out in black and white that subscriptions “may not be shared with individuals beyond your household,” the co-sharing of someone’s subscription is voluminous. During the height of the pandemic, 35 percent of those with Netflix accounts shared the service with someone who doesn’t live with them.

“I think it’s interesting that few streaming services crack down on sharing,” Rossman told ConsumerAffairs. “It seems that they’d rather sell a shared subscription than no subscription at all – because they have to know this is happening.”

Leaving valuable points on the table

As streamers rushed to add on services so they could binge on the likes of ‘Homecoming’ and ‘The Not Too Late Show with Elmo,’ more than a quarter (28 percent) gave little to no thought about how to pay for those new subscriptions.  

Rossman says that was a golden opportunity to snatch extra rewards points, especially as more credit cards add bonus streaming rewards categories.

As an example, he points out that during the pandemic, Chase Freedom added streaming as a second-quarter 2020 bonuscash back category in addition to grocery stores and gym/fitness memberships. And American Express jumped in the at-home frenzy by adding $20 per month streaming credit from May through December to compensate for Platinum Card cardholders who were using fewer travel benefits.

Don’t tie all your credit cards to subscriptions

Holly Johnson, “frugal expert” and founder of the website Club Thrifty, cautions consumers about focusing their whole rewards strategy on points earned for streaming subscriptions.

For example, Johnson pointed to Netflix subscription costs. At about $10 per month, that means a subscriber is paying $120 per year for the subscription. If the subscriber is only earning 6 percent back, then they’re only netting $7.20 in rewards for the year in that category.

“You’ll only earn so many points on those relatively small purchases, so I would suggest worrying about how much you’re earning on your big purchases for the month, such as groceries, gas, day care, etc.,” Johnson said.

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