The escalating cost-of-living crisis in Australia is forcing households to rethink their entertainment budgets, with more Australians cancelling subscriptions to paid media entertainment services than signing up.

The shift is seeing consumers turn to cheaper ad-supported or free content, according to the latest edition of Deloitte's annual Media and Entertainment Consumer Insights report.

The report reveals that the average monthly household spend on digital entertainment services has dropped 8% to $57. Over a third of households are currently exceeding their target monthly entertainment budget, prompting a reassessment of their media consumption habits.

The number of households with at least one paid entertainment subscription has slipped from 86% to 84%. Among those who cancelled a Subscription-Video-On-Demand (SVOD) service, 70% cited cost-saving as the primary reason. Meanwhile, 31% of consumers indicated they’d be interested in subscribing to a cheaper, ad-supported tier of a subscription service.

Video remains the most popular form of entertainment, accounting for more than half the time Australians spend on digital entertainment. While live and catch-up free-to-air TV continues to be the most popular video entertainment choice, SVOD services are steadily gaining ground.

Interestingly, Gen Z shows a preference for short-form social media content, with 56% opting to watch user-generated content (UGC) online over TV shows and movies on video streaming services.

In terms of ad-free content, 60% of media consumers prefer to pay for ad-free TV and movies, and 48% for ad-free music. Sport remains a significant draw, with 76% of Australians watching sport at least weekly. Younger audiences are more willing to pay for sport content, with 68% of Gen Z compared to 48% of Boomers.

The report also highlights a surge in interest in women’s sport, with almost half of all respondents saying the Matildas have inspired them to seek out more women’s sporting content.

Peter Corbett, Deloitte Lead Partner for the Telecommunications, Media & Entertainment Sector, said, 'This year's survey shows how rising cost-of-living pressures and an increasing number of entertainment choices, content providers, services and subscription types are changing the media ecosystem.'

Jeremy Smith, Deloitte Media and Entertainment strategist and report author, added, 'This year we are seeing a combination of effects playing out – myriad entertainment options, household budget pressures, more discerning consumers and the effect of new business models changing the way Australians consume Media and Entertainment.'

Sandra Sweeney, Deloitte Sport Practice Lead, noted, 'The undying allure of sports for many Australians continues to shape our media and entertainment experiences. The success of the Matildas and the FIFA Women’s World Cup have changed the game for future tournament experiences and engagement of Australian audiences in women’s sport.'

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