Australian households are cutting back on subscription services and turning to free or cheaper ad-based content for entertainment, a new report has revealed.

The Deloitte Media and Entertainment Consumer Insights annual report, released on Monday, shows how Australians are spending less across all generations as they feel the cost-of-living crunch. 

On average, monthly spending on digital entertainment services such as Netflix or Binge has fallen from $62 to $57 per household across all generations: however, previous report data shows how different generations have increased and cut their spending. 

The report shows millennials have made the largest cut to their subscriptions, with 45 per cent saying they are exceeding their monthly entertainment budget — across all generations, 34 per cent say they are exceeding their budget. 

Major drivers leading to cutting back include the rising cost of living, growing popularity of ad-supported subscriptions, and increase in free content, according to the report. 

A signal for churn can be a service going unused. Although Deloitte has not captured data on specific services, the data provided by the agency shows the types of services consumers say have gone unused for the past six months. 

Although some households have increased their number of entertainment services, the number unsubscribing outweighs the number of new subscriptions.

Deloitte lead partner for the telecommunications, media and entertainment sector, Peter Corbett, said while this reflects the impact of the rising cost of living, it also shows that in 2023, time is the new currency.

“With a formidable influx of media options, we’re not just untangling the web of competing subscription video-on-demand services,” he said.

“Our choices are also oscillating between social platforms, music, gaming, reading, and even in-person interactions.”

Consumers also want aggregation. 

The report shows 48 per cent find it hard to know what content is available and where, 70 per cent wish they could manage multiple subscriptions in one place and 73 per cent wish they could search and discover content across all their subscriptions in one place.

Mr Corbett said digital entertainment was “relatively sticky” compared to other spend items. 

“Our respondents said they would give up spend on eating out, alcohol and tobacco before they would give up subscriptions,” he said. 

It also demonstrates why some households believe they will grow their number of streaming services in the next 12 months. 

Overall, the report suggests the trend of decreasing subscriptions looks to be similar in 2024.