Member Insight: Is the Covid subscription boom over?
July 7, 2022
Roy Barak is the CEO of Vindicia, a digital subscription retention company. Here he offers his insight into one of the biggest issues facing the market at the moment.
Apple, Tesla, and Alaska Airlines walk into a bar, and try to launch a subscription model…
No, that’s not the start of a joke. It’s actually happening.
Over the past decade, the subscription industry has exploded. Revenue from subscription-based businesses grew by an astonishing 437%. During the COVID pandemic, this trend accelerated as companies searched for ways to connect customers to their products and services. From cars to baby clothing and travel, the subscription model seeped into almost every vertical as consumers turned to the frictionless, comfortable, and convenient experience that subscriptions offer.
Now the pandemic looks to be waning (fingers crossed!), stores have reopened, flights have resumed, and people are adapting once again. But the consumer is not the same person that they were in 2019. Sure, we’ve just been through a subscription boom, but is it over?
When Netflix released its Q1 earnings for 2022, the world was shocked. The streaming giant lost 200,000 subscribers, its first loss in a decade. Yes, we are now entering an era of “subscription fatigue.” Consumers are overwhelmed and oversubscribed, and many are watching their wallets and dropping subscriptions that they bought during the pandemic boom.
On the other hand, more companies than ever are getting into subscriptions or expanding them, even big brands, like Tesla, Alaska Airlines and Apple Business Essentials. Although subscription fatigue is real, these brands and many more understand that the subscription model is here to stay.
The consumer has changed forever
For consumers, the experience of the pandemic opened up a world of possibilities they had never considered before. Out of sheer necessity, people were buying just about everything online, delivered digitally or to their front doors. No doubt, consumers have changed. They now expect satisfying experiences that don’t just offer value for money, but help them feel safe, appreciated, and heard. They want the products and services they love, at their fingertips whenever they need them. And they don’t want to whip out their credit cards every week or month. They want the transaction to be seamless, smooth, and trustworthy. In short, they don’t want to think about their subscriptions; they just want to enjoy them.
Consumers have discovered the magic of subscriptions, and there is no turning back. Rather, it’s about becoming smarter with your subscription offerings.
Smarter comes from data
The subscription model is here to stay. But it’s becoming more competitive, and that means businesses have to get smarter. How? By being data driven.
At Vindicia, we know the power of subscription data because we’ve been collecting and analyzing it for nearly two decades. Together with our end-to-end subscription tech platform, our subscription intelligence can help you build customized user journeys and personalized bundles that delight your users. And our Retain solutionworks to prevent churn and recover lost revenue, making sure you realize every potential subscription dollar from your customer base.
The boom’s not over
With the recent news from Netflix and the demise of CNN+, it’s clear that the pandemic is over and the sands are shifting for the subscription industry again. But the subscription boom is certainly not over because consumers are different now. To keep up with the increased competition, you’ve got to be better, smarter, and more sophisticated than ever before. Don’t settle for less than Vindicia’s best-of-breed subscription tech stack to see you through.