The subscription economy’s rapid growth demands a shift to subscription-first models:
The subscription economy has grown over 435% in 9 years and is expected to continue on this upward trend.
Moving forward, businesses not only need to incorporate digital subscriptions, but they need to follow the examples of The New York Times and the FT and proactively shift to a subscription-first approach.
Ad-revenue, though it will still retain its importance, will be supplementary to subscription revenue. In the future, it’s likely that ads will only be lucrative where publishers are able to partner with niche specific advertisers and offer them deep targeted understanding of their subscriber audience.
A significant element of subscriber retention is abandoning notions of ‘one-size-fits-all’ product offerings and recognizing expectations for subscription packages tailored to specific audience segments. Personalization is no longer the exception, but the expectation. Indeed, according to McKinsey, companies that strongly personalize their products already generate 40% more revenue than average players. Not surprising when you consider that 72% of consumers surveyed said they expect businesses to recognize them as individuals and to know their particular interests.
Moving forward, digital publishers are likely to harness AI to personalize landing pages, content recommendations and ads to align with individual users’ profiles and preferences. Soon enough, it will no longer be about simply ‘having a subscription’, but about the quality, value, access and level of personalization contained within subscription products.
Stay agile and open to rapid transformation.
For now, this means:
– Harnessing the power of AI and automation for more personalization. The subscriber journey should be hyper-personalized, propelled by automation and first-party data insights.
– Prioritizing subscriber retention. As the subscription economy grows, publishers should invest in their subscriber relationships for the long-term to maximize retention.
– Platform fluidity & diversification. Publishers should be prepared to continually innovate and diversify their content output and subscription packages to keep up with developing trends and consumer behaviours. (“The Future of Subscriptions,” 2024, paras. 6, 12-14, 20, 24, 38, 39)
This article suggests all businesses should shift to a subscription-first model; it’s an interesting perspective to read compared to articles noting feelings of being overwhelmed just by the current amount of subscriptions alone. Balancing customers’ differing opinions with a business’s need for consistency is the line I’ll have to walk when determining how free freedom of choice really can be.
If it’s true that a subscription service will be the standard, and consumers will expect more customization and value to lead them one way or the other, how does a business promote and highlight that difference? It’s also worth pointing out a lot of the strategies given to stand out, I had also found in The future of digital banking. How unique will these differing services truly be if Ai is personalizing everything? Will Ai connect them all? Will it merge into a muddled mess that’s no longer personalized to you but the mess it created? I already notice that sometimes with algorithms where I’ll look up one thing for another person, and now my feed is filled with it. How would Ai combat this and sort my data as useful information it can personify or discard?
This article also mentions subscriber retention and content output, which sparked some questions when applying it to my scope of trying to enhance self-growth over time. In order to increase financial retention, how can banks be more integrated into everyday life in a way that adds convenience and not an annoyance? Is there a way content output could apply to banking in the guise of a financial or educational tool in order to provide new opportunities and incentives?
References
The Future of Subscriptions. Zuora. (2024, February 26). https://www.zuora.com/guides/the-future-of-subscriptions/
Kalim, F. (2021, March 5). The subscription economy has grown over 435% in 9 years (and the uptick is expected to continue). Media Makers Meet. https://mediamakersmeet.com/the-subscription-economy-has-grown-over-435-in-9-years-and-the-uptick-is-expected-to-continue/
