We have talked about subscription fatigue so much that there is subscription fatigue fatigue in the newsletter circles.
There is another one that is under-reported – Subscription creep, of the digital kind.
In 2018, WestMonroe, a digital consulting firm published the results of its poll titled ‘The State of Subscription Services Spending’. 84% of people surveyed across all subscription categories (from mobile services to wellness apps) underestimated how much they spend on monthly subscriptions. In August 2021, the same survey revealed that the number of people underestimating their spending increased to 90%. The average monthly spend on subscription services was $273, up from $237 in 2018.
In the early 2010s, we famously started cutting the cord. We now have as many subscriptions as there were channels. Too many digital subscriptions is not the same as too many cookies in the jar that fill up to brim every month. The gluttony is an alarm and we can turn off those cookie deliveries. But digital subscriptions are invisible and not outwardly harmful. We pile them up – from Substacks to Spotify, Prime to Podcasts.
We subscribe to digital services much the same way we buy books and never read. A series here, a documentary there is how it starts and the creep up happens. The churn is the second-order problem for digital services. User growth is going to be the top-most problem. Users have started recognizing the incremental creep with every new subscription and they side-step it by using the normie Youtube that premium users snigger about.
Last month, Netflix shares fell 20% after it disclosed that its growth in new subscribers slowed down. Earlier, Peloton’s investors expressed misgivings at the way the company was being managed, as it dealt with erosion in demand.
I hear the stock is up Friday with some swift after-market trades. Maybe nothing?
Deloitte Global predicts that in 2022, at least 150 million paid subscriptions to streaming video-on-demand (SVOD) services will be cancelled worldwide with churn rates up to 30%. In 2019, SVOD/OTT experienced a churn of 10% according to research by Recurly, the subscription management company. This sharp increase in churn rates, however, contrasts with the overall market outlook for the subscription economy of which streaming media, entertainment, and mobile services are huge components.
Through 2020 subscription businesses grew by about 12 percent – with OTT video streaming, digital media and eLearning subscriptions growing by over 25 percent according to the digital services company Vindicia that has been tracking this space.
The average American has 3.7 retail subscriptions according to PYMNTS and Sticky. io Subscription Commerce Conversion Index which is not a fatigue-inducing number. But digital subscriptions are a different story.
In 2019 the average consumer had around 75 passwords. According to NordPass, the password management company, this number went up to 100 in 2020. Now that is a big enough number to induce fatigue and yet it increased by 25% in one year.
Deloitte’s Digital Media Trends Survey predicts that close to 47% of American streaming media consumers were put off by the growing number of subscription services and 40% of them wished to terminate at least one streaming service.
A 2021 study by JP Morgan on consumer habits related to recurring payments revealed that 60% of respondents have forgotten about at least one recurring payment. Amnesia perhaps and not fatigue. But when they do remember they want to cut back. But this time, there are too many cords.
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