Subscription Economy is Thriving - New Data Shows Opportunities for Services and Consumers

Subscription Economy is Thriving - New Data Shows Opportunities for Services and Consumers

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Joe Andrews

Sr. Director, Marketing


Are consumers facing subscription fatigue? A survey highlighted in TechCrunch last week sought to understand the implications of the growing number of subscription services on consumers. The hypothesis that consumers may be saturated by their subscriptions – and looking to curtail their monthly spend, could mean potential fallout for popular services like Dropbox and Spotify.


Fortunately for those of us embracing the Subscription Economy, the answer seems to be the opposite, at least directionally; that there is, in fact, upside for services that use a recurring revenue model. Some may contest the survey methodology that clearly biases for an early adopter profile; however, we believe the results are meaningful.


Here are the findings we were excited to learn, and the opportunities to consider for those companies looking to implement subscription models:


1)   There’s headroom for subscription services revenue growth – specifically, consumers are budgeting 240% of what they actually spend. And 86% plan on increasing their spend.


2)   Consumers are willing to pay for free services like Gmail and Wikipedia, suggesting an opportunity for companies to build additional value on top of major consumer platforms that can be monetized, e.g. Gmail plugins like Boomerang, and supporting more use of the freemium model to hook in new subscribers.


3)   Recommendations from friends and family are the most important drivers of influence during the purchase process (more important than business contacts and expert bloggers), suggesting opportunity to more fully incorporate and invest in social influence capabilities in paid services.


Despite the directional nature of the survey, it supports the notion that there’s a real upside opportunity for paid subscription services and for value-add services that build on existing free platforms.


We at Zuora support further study into subscriber behavior and preferences that will help the vendor community better deliver value to our customers and enable us to thrive in the Subscription Economy.

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