What's happened
A new report shows Australians are spending more on subscriptions, averaging $78 monthly, up 24% since 2024. Many are cancelling unused services amid rising costs and subscription traps. Meanwhile, experts advise switching broadband, energy, and banking to save over a31,200 annually.
What's behind the headline?
Subscription costs are spiraling due to market inflation and consumer behavior. Australians now spend an average of $78 monthly, with 36% over budget and 78% concerned about total costs. The rise is compounded by locked-in contracts and difficulty cancelling, often described as the 'Hotel California effect.' This creates a 'subscription trap,' where consumers find it hard to exit, prolonging unnecessary payments. Meanwhile, the broader economic context shows Australians are spending less on media overall, yet their subscription bills continue to grow. The key takeaway is that consumers need to be more proactive, using comparison tools and scrutinising their subscriptions to avoid unnecessary costs. The trend indicates a need for regulatory scrutiny over cancellation practices, which are designed to be difficult, and for consumers to adopt more strategic switching habits to manage their expenses effectively.
What the papers say
The SBS report highlights how Australians are increasingly aware of their rising subscription bills, with many cancelling unused services to save money. SBS quotes consumer advocate Chandni Gupta, who describes the 'subscription trap' as a business tactic that makes cancelling difficult, akin to the 'Hotel California effect.' Meanwhile, The Scotsman emphasizes that switching broadband and energy providers can save households hundreds annually, with experts like Martin Lewis advising consumers to compare deals and switch to full fibre broadband for better value. Both sources agree that proactive management and comparison shopping are essential, but SBS focuses more on consumer struggles with cancellation, while The Scotsman offers practical tips for immediate savings. The contrast underscores the importance of both consumer vigilance and market competition in tackling rising costs.
How we got here
Subscription spending in Australia has increased significantly over recent years, driven by market price hikes and consumer habits shifting towards recurring payments for media, music, and sports. Despite higher costs, many consumers struggle with cancellation due to business tactics like subscription traps, making it difficult to reduce expenses.
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