From live TV streaming to video-on-demand streaming, cord cutters are seemingly in a constant battle with rising subscription prices. It makes some people wonder if they're saving any money versus the cable bills they used to pay.
One option some streaming TV services offer for saving some cash is annual subscriptions.
The premise is pretty simple: You pay them one lump sum for 12 months of service in exchange for a lower “per month” price.
But is this actually a good idea?
In this article, we’ll walk through the pros and cons of annual streaming TV subscriptions. We’ll also look at some alternative money-saving ideas for streaming to help you put more cash back in your wallet.
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Annual vs. Monthly Subscriptions: Which Is Best for Streaming?
While live TV streaming services like YouTube TV and Sling TV are content offering you monthly access to your favorite channels, video streaming services like Paramount+, Peacock, Max and Hulu are looking for a long-term commitment.
This leads them to offer discounts on annual subscriptions.
Annual subscriptions are paid in one lump sum payment at the beginning of a 12-month term. In exchange for that commitment, streaming services offer you a lower “per month” price on the content.
There’s usually a discount baked into the “regular” annual plan pricing, but some services have limited-time sales that offer a chance to save significantly more.
Let’s take a look at the pricing models to see just how much you could save.
Regular Pricing for Monthly vs. Annual Subscriptions for Video Streaming Services
Not every streaming service offers an annual subscription. Services like Netflix only bill monthly.
But the ones that do have the following pricing:
| Streaming Service | Regular Monthly Price | Annual Subscription |
|---|---|---|
| Hulu (ad-supported) | $7.99 | $79.99 |
| Disney+ Premium | $13.99 | $139.99 |
| Max (ad-supported) | $9.99 | $99.99 |
| NBC’s Peacock Premium | $5.99 | $59.99 |
| Paramount+ Essential | $5.99 | $59.99 |
| Apple TV+ | $9.99 | $99 |
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On the surface, this seems like a great way to save money.
But you should ask yourself some of the following questions before making the commitment:
- How much will I save? Some annual plan deals are better than others. Some of them, like Paramount+ and Peacock, offer a "12 months for the price of 10" approach. That means committing to the annual plan will save you $12 per year for their ad-supported tiers.
- Have I tried this service already? If this is a new streaming service to you, you may want to consider trying a single month (or a free trial) to see if you like it before committing to a full year.
- How much do I actually watch this service? If you are a casual consumer of this streaming service's content, you may find that your "per month" watch time is pretty low. Prepaying for 12 of those months could be overkill.
- Is what I watch on this service seasonal? If you're signing up for the new seasons of your favorite show, remember that those are usually only released over a 2-3 month period in any given year. If that's your primary reason for paying for a service, you'd save more money by only subscribing those couple of months each year.
Watch for Even Better Discounts During Limited-Time Sales
While the chance to save a few bucks per month with an annual subscription is enticing, you may want to wait for a streaming service to go “on sale” if you’re looking for optimal savings.
There are a handful of “limited-time” offers that pop up each year that can save you more than half the price of an annual subscription.
Some examples include:
- Hulu has been known to run Cyber Monday sales that include heavily discounted annual subscriptions. Last year, it was "get a year of Hulu for only 99 cents per month."
- Peacock has run promotional offers, like the "Summer of Peacock" that gave users a chance to lock in an annual subscription for the ad-supported tier for as low as $19.99 per year.
- Max recently ran a March Madness promotion that gave new and returning customers a chance to lock in the annual subscription on its ad-supported tier for just $69.99.
Reminder: Check To See If You Can Get It For Free
Before you get too involved with crunching the numbers on annual vs. monthly streaming TV subscription costs, you may want to take a few minutes to ensure that there’s not a way to get these services for free based on a tie-in with another product that you’re already using.
Some examples of video streaming services being included with the price of other products include:
- An Amazon Prime subscription includes the ad-supported version of Prime Video
- A Walmart+ subscription includes access to the ad-supported version of Paramount+
- Select T-Mobile wireless phone plans include access to Netflix
- Select Verizon wireless phone plans include access to Disney+
What Does Clark Think?
Money expert Clark Howard says an annual plan is only the way to go if you know it's a streaming service you'll watch all year AND the discount is significant enough that it's worth prepaying for 12 months.
“If there is something that you really like and you know you’re going to watch it, then you should buy the annual plan — as long as the discount for that year is substantial enough that it is worth doing.”
Otherwise, you may be better off paying month-by-month and canceling when you’re finished streaming the shows you enjoy.
Oh, and if you ask him about streaming, Clark is almost assuredly going to suggest that you try his favorite new trend: free streaming TV. More about that later in the article.
Another Cost-Cutting Streaming Hack: Ad-Supported Subscriptions
Whether you’re considering an annual or monthly subscription, there’s money to be saved by opting for the ad-supported tiers of streaming services.
For example, Netflix offers its service at a $8.50 per month discount by opting into the Standard with Ads tier ($6.99) as opposed to $15.49 for the Standard package.
That may seem like a small price difference, but it adds up to $102 per year back in your pocket.
And that’s just from one streaming service. Imagine how much you could save by switching all of your streaming services to ad-supported tiers.
Note: Some streaming services do reduce the amenities offered for ad-supported tiers, such as the number of concurrent streams or the ability to download content for offline viewing, so you’ll want to weigh the value you place on those features before downgrading your plan.
Don’t Forget the Free Stuff
If you’re willing to make some sacrifices on access to the “latest and greatest” shows, you can completely avoid the monthly versus annual subscription debate by ditching subscriptions altogether.
Free streaming TV services are an increasingly popular alternative to the paid variety. In exchange for no subscription fees, you'll be asked to watch a healthy number of commercials with your content. So you're paying for the service with your time.
It probably comes as no surprise to Clark Howard loyalist that Clark's favorite streaming services are the free ones.
Clark's preferred freebie streamer is Pluto TV, which offers live channels and on-demand content from Paramount Global. This includes titles from well-known brands like CBS and Nickelodeon.
Team Clark has spent a good amount of time evaluating the best free streaming options available.
Some of our other favorites you may want to check out include Tubi TV, Amazon Freevee and The Roku Channel.
The content options for free streaming are frequently improving, so you may want to check them out again if you haven’t tried it in a couple of years.
Final Thoughts
The value of an annual subscription truly varies from household to household.
If you’re someone who regularly uses a particular streaming service, there is money to be saved by opting into an annual commitment.
But if you’re the type of person who fades in and out of watching streaming apps throughout the year, you may find that you’re actually losing money by committing to 12 months of discounted service rather than simply paying for one or two months per year to watch the content you enjoy.
To optimize your spending on video streaming services, you should do an honest self-evaluation of your viewing habits to determine which streaming services are your top priorities.
If you find that you’re paying for a service that doesn’t rank high on your list of priorities, it may be time to consider pulling the plug on that payment no matter the length of your agreement.
The nice part about the streaming TV era is that there is no “early cancellation” fee, and there’s no barrier that keeps you from signing back up for a service if you determine that you can’t live without it in the months after cancellation.
Do you pay for your streaming TV subscriptions monthly? Or do you take advantage of the discounts offered for annual subscriptions? We’d love to hear about your experiences in the Clark.com community.
The post Are Annual Streaming TV Subscriptions Worth the Discount in 2024? appeared first on Clark Howard.