What’s Next for the Subscription Economy? Zuora’s Jennifer Cooper Shares 2022 Predictions

Jen Cooper
VP, Industry Strategy,  

After another unpredictable year, it was no surprise that we continued to see companies from every sector embrace subscription-based models for their resiliency and stability. But how will this play out in 2022? Here’s how I expect subscriptions to shape the upcoming year from the technology industry, to media & entertainment, manufacturing, and beyond.

IoT Fuels growth in services for manufacturers

In the past few years we’ve seen a dramatic industry shift as both industrial and consumer-based manufacturers moved from solely selling products via one-time transactions to exploring offering recurring services. This has been enabled by the Internet of Things (IoT), which provides deep insights such as machine and device utilization and monitoring, along with signals received from many touch points along the supply chain and ecosystems. Manufacturers are finding that subscription-based services help them move more quickly to adapt to customer demand, build long-term customer loyalty and create sustainable long term recurring revenue streams. Companies such as Caterpillar, IBM, General Motors and more have all seen success from their subscription offerings and continue to lead their industries in the shift to this new business model.

In 2022 more manufacturers (industrial, automotive, medical devices and smart factories) will launch and expand their subscription service offerings. This is part of a decade-long shift at the end of which, we can expect “Anything-as-a-Service” to be the dominant offering from all types of manufacturers.

Media focuses on their audience relationships, while advertising takes a back seat

Media companies, from streaming to gaming to music, are all realizing that the key to growth moving forward is 1:1 relationships with their audiences. They’re finding that they can use customer insights to customize their content in real time alongside shifting consumer preferences and trends to create highly personalized offerings that accelerate growth. Just look at announcements of new subscription services from Playstation, CNN, Apple and more.

Key to these insights though, is shifting to the subscription business model as an alternative revenue stream over advertising. Creating a better experience that customers are willing to pay a premium for means putting their preferences and interests front and center. This is a direct result of being “customer centric,” listening to audience feedback and minimizing advertising in exchange for subscription fees.

In 2022 we will see a larger shift from pure-play ad-supported services, in favor of growing subscriptions, as the industry pushes forward to optimize and scale D2C revenue streams. Audiences will continue to engage with, and be willing to pay for premium content, and innovative subscription models will emerge, particularly within spaces like gaming, AR/XR, NFT’s and edu-tainment.

Retail perfects the subscription recipe

Many traditional retailers have been working on their Omni-channel and omni-revenue model strategies for years. Most have realized that in order to compete with Amazon, they needed to create their own D2C relationships, which spurred a surge in Retail subscription services. Amazon themselves, have pioneered many innovations in subscription services with their Prime offerings, acquiring Whole Foods to create Amazon Fresh, and experimenting with delivery of medications – all based on subscription services.

2022 will be the year that many top tier retailers create their own “secret subscription sauces” centered around 360 degree customer insights, subscriber data to guide personalization and deepen engagement via innovations in experiences. We’ll see more experimentation with unique new offerings in 2022 beyond simple subscription boxes as retailers move to the next big e-commerce idea. Those that emerge with winning offers will mix flexibility, convenience and customization with a balanced pricing strategy.

Telehealth becomes more refined

In healthcare, every second and data insight is crucial to providing the best patient care. Over the past few years, the world has changed greatly as have the needs of patients. Subscription services have emerged as a key healthcare tool to meet customers where they are while maintaining continuity of long-term trusted relationships.

In 2022, we will see telehealth offerings that emerged during the pandemic refine their services and become deeply entrenched in the modern healthcare experience. This will happen both within primary care offerings like physicals and tech tools that monitor vital signs as well as daily life health and wellness products like subscription electric toothbrush head replacements.

I’m very optimistic for these big trends and ideas to take hold and looking forward to seeing what’s still to be unveiled in 2022, and the unexpected and new players entering the Subscription Economy.