The subscription economy has skyrocketed to the point that it seems like everything is a subscription. On one side, the growth of subscriptions is driving benefits, new services, and more options for consumers and businesses. On the other side, subscription fatigue, often driven by customer frustration from there not being enough perceived value in the product, is driving customer unhappiness and churn for businesses.
One thing that is clear is the subscription economy is big business. Below, we’ll take a look at a few key numbers you should know about the booming subscription economy.
A recent report from UBS Wealth Management estimates that the subscription economy with reach 1.5 trillion USD by 2025. That’s more than double the addressable market size in 2020.
The United States consumes a majority of all digital subscriptions worldwide. The next closest market is Europe at 21% followed by China at 14%. For more details, see the full UBS report.
Mobile app spending is one of the first places we often think of when it comes to subscription businesses. Mobile devices have become integral to our lives and that is reflected in our spending habits. Data from Sensor Tower shows continued large growth in mobile spending. In the last year, the top 100 subscription apps’ revenue was up 34% alone.
Software as a Service (SaaS) is another top-of-mind subscription sector after mobile. 2020 was a big year for IPOs in the tech sector and SaaS in particular.
Recent reports see revenues in SaaS doubling over the next 5 years to reach US $307B by 2026.
Companies in the e-commerce subscription market are set to eclipse every other category of subscription revenue over the next few years. From clothes to snacks from Japan, this space covers everything you could ever want to buy. Amazon alone had $25.21 billion in subscription revenue in 2020.
Recent research available on UnivDatos shows the e-Commerce subscription market growing to $478B USD with a 63% CAGR from 2019.
While streaming services aren’t the largest category of subscription services, they are the first ones that most of us think about.
Subscription Video on Demand (SVOD) services are the most popular category of streaming services. Netflix spent $17 billion on content in 2020, Disney+ crossed 100M subscribers 16 months after its launch, and with all the new entrants from HBO Max to Discovery+, Netflix’s market share dropped by 31%.
With so many huge companies fighting for our attention, it is no surprise that this sector of the subscription economy continues to see growth. Research estimates that by 2025 SVOD revenue grow to $100 billion with the number of subscriptions topping 1.1 billion.
Streaming audio including podcasts and music is also a growing category not to be ignored, with Spotify and giants like Apple, Google (through YouTube), and Amazon all in the mix. Grand View Research has streaming audio growing to $55 billion USD by 2025 and up to $76.9 billion USD by 2027.
Last but not least, the business of running a subscription business is booming. This includes subscription management companies like publicly traded Zuora, payments infrastructure giant Stripe, and recent entrants like Nami ML that provide a platform to create better subscription experiences.
How big is this space and how many companies are fighting for a slice of the subscription industry pie? Business software and review site G2 is tracking over 100 companies in 4 different categories in the subscription ecosystem, including Subscription Management, Subscription Billing, Subscription Revenue Management, and Subscription Analytics. Take a look at the breakdown below.
Is your app required to use In-App Payments? Learn the rules around payment methods in your iOS app with our guidelines to Apple In-App Payments.
Track these 19 metrics to accelerate growth of your mobile app revenue, with this definitive guide to subscription app analytics.