Many streaming services are playing both sides of their user base.
They are often marketed as a lower-cost alternative to traditional cable or satellite TV service.
Conversely, executives at streaming services (particularly ad-supported streaming services) love to tout the high average household incomes of their subscriber base.
Third-party data
from Nielsen, ComScore and other sources show that higher-income households do, in general, subscribe to more streaming services. They are more likely to pay for both cable and streaming
services.
Among consumers living paycheck to paycheck, however, the data paints a more nuanced picture.
According to a new report from financial technology
firm Earnin, Netflix’s growth among those living paycheck to paycheck has been stagnant for the past five years, hovering around 24% of consumers. Still, Netflix has grown from just shy of 30
million U.S. subscribers in 2013, to 60 million U.S. subscribers in 2018.
Netflix’s flat performance among lower-income consumers is surprising — the same data shows
video-streaming services as a whole have seen their usage rise by 28% over the past five years among those living paycheck to paycheck. More than 30% of users surveyed subscribing to at least one
service.
However, that number is below the U.S. average, which has seen streaming subscriptions rise by more than 100% year over year, according to some studies, but ahead
of the data about Netflix.
Earnin’s data also found that around one in eight users of its service that subscribed to a streaming subscription service ended up having an overdraft
fee caused directly by their streaming subscription. The company estimates that those fees effectively raise the end cost for lower income consumers by about $0.80 per month.
“It’s making the low-cost alternative to cable TV more costly than it needs to be,” says Earnin economist Peter Griffin, who conducted the research.