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Data for today’s episode is provided by Mercator Advisory Group’s Blog – Subscription Economy Accelerates as Stay-At-Home Lifestyle Spurs Demand
Masters of the Subscription Universe:
With 60% of consumers subscribed to an online service, six players have come to exemplify the subscription service bundle tactic.
- Amazon & Amazon Prime: Prime bundles retail goods discounts, faster delivery, video & music streaming, gaming, eBooks, and Whole Foods discounts. 200 million users that pay $119.
- Apple One: High margin services have been increasing along with physical devices bundling: music, TV, Arcade, iCloud, News+ and Fitness plus. 600 million worldwide subscribers.
- Disney+: With parks and movies limited in 2020, Disney went digital. Disney smashed its customer acquisition goals and is now aiming for 260 million users by 2024.
- Netflix: 200 million subscribers with room to expand globally. Expanded international content creation is next Netflix’ horizon.
- Spotify: The world’s largest streaming music provider is available in 92 countries with almost 300 million users, half of whom pay $10 a month to listen.
- Walmart+ is playing catch-up in the subscription world, but now has bundled delivery, fuel discounts, and Walmart Pay app features for a $98 annual fee
The subscriptions economy has become a growth segment of the U.S. services economy. While subscriptions go back many years, it’s been the digitization of commerce and consumer purchase behavior that now drives the subscriptions market. Through 2022, online subscriptions will find higher growth due to continued consumer popularity of streaming services and software. Payments firms, including ISVs, merchant acquirers, and payment gateways, must understand the subscription management requirements of sellers and key trends that are driving market growth. A new research report from Mercator Advisory Group, Subscription Economy Accelerates as Stay-At-Home Lifestyle Spurs Demand, sizes up the U.S. online subscriptions market and its future direction.
“Video and music streaming has led the rapid growth of online subscription services for stay-at-home households during 2020. Online subscriptions have become a growth area within e-commerce and will continue in the foreseeable future. Bundled subscriptions prove to be a winning marketing strategy for the leading industry players such as Amazon and Apple and consumers have responded enthusiastically,” commented Raymond Pucci, Director, Merchant Services Practice at Mercator Advisory Group, the author of this report.