Retail

How Digital Subscriptions Open Doors To Global Content

Digital Subscriptions

In the age when consumers can enjoy digital content at their fingertips, subscriptions are no longer just a novelty: They are opening the doors to libraries of music, movies and news — a pivotal way that consumers access information and entertainment from their favorite artists as well as writers through their computers and mobile devices.

Scribd, for instance, enables customers to access over one million eBooks and audiobooks for a monthly fee and is part of a booming eBook market. According to some estimates, the eBooks industry is on the way to be valued at approximately $14.1 billion by 2023, according to the PYMNTS Subscription Commerce Tracker. But, to make sure consumers don’t get bored or overwhelmed with their plans, companies such as Scribd are bundling benefits such as The New York Times into their plans.

From Scribd to Spotify, merchants are deploying a variety of strategies to drive subscriptions and grow their user bases. These are just some of the ways that subscription businesses — and the subscriptions market as a whole around the world — are growing as consumers engage with content through digital services for music, videos and news in the age of digital streaming: 

The projected number of households globally that will subscribe to at least one streaming service by 2024 is 310 million. Spotify, for instance, had 87 million paid members as of a November report — a 40 percent year-over-year (YoY) increase from 2017. The company revealed an increase of 4 million paid users in Q3 and an additional 25 million paid customers within the past year at that time. In addition, the company noted that users who opt into the free model of the service numbered 109 million, which marked a 20 percent increase from the year prior. And the company said in a statement that “growth continues to be healthy across our Family and Student plans, and the strong retention characteristics of this base continue to drive churn lower.”

The estimated value of India’s mobile gaming market by 2020 is $1.1 billion. In fact, the country’s mobile phone market saw shipments grew 11 percent in 2018 — and smartphone shipments increased 10 percent. Counterpoint said in a press release that the country is the second biggest market for smartphones in the world behind China. The firm also noted that India has more than 430 million smartphone users. Yet the country accounts for less than half — or 45 percent — of the total addressable market for smartphones. Counterpoint Research Analyst Karn Chauhan said in the release, “India is underpenetrated relative to many other markets.” He continued, “This was one the key reasons for its growth in 2018, where not only new users shifted towards smartphones, but there was a healthy upgrade within price tiers …”

Nearly three in 10 — or 28 percent — of Filipino consumers stream pirated content using illicit streaming devices for low annual fees. Some consumers use these boxes for their television, which are referred to as Illicit Streaming Devices (ISDs). According to one survey, some consumers have said they have canceled all or part of their television subscriptions with services that are legal. Some consumers have even canceled subscriptions as a “direct consequence of owning an ISD,” according to SunStar. Avia’s Coalition Against Piracy (Cap) however, noted, per reports that “The damage that piracy does to the creative industries is without dispute. However, the damage done to consumers themselves, because of the nexus between content piracy and malware, is only beginning to be recognized.”

The anticipated global value of subscription-based businesses by 2020 is $528.8 billion. Moreover, some companies want to bring new offerings into the market: Apple, for instance, reportedly is seeking to build a news subscription service. Users would be able to read an unlimited amount of content from participating publishers with the service in exchange for a monthly fee (a final price hasn’t been set yet, however). The service is expected to launch later this year as part of the Apple News app and is reportedly one of multiple news services in the works by Apple, including original television programming.

The increase in the share of U.K. households with SVOD/OTT services reported in Q3 2018 over the same period a year earlier was 22 percent. Netflix reportedly is the most well-used on-demand TV service for households in the U.K. And Broadcasters’ Audience Research Board (BARB) data found that 11.6 million households in the U.K. subscribe to one or more of three services — Amazon Prime Video, Now TV and Netflix. In addition, the BARB report noted a 40 percent spike in households that had at least two subscriptions. The news comes as Netflix said in January that it added 8.8 million memberships in the fourth quarter of 2018, with 7.3 million added internationally.

From Netflix to Scribd, subscription companies are looking to international markets for growth in the age of digital streaming. Scribd, for its part, recently signed a deal in Spain and is looking to localized publishers as consumers around the world tap into digital content such as eBooks with the help of subscriptions.

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