The subscription market is rapidly changing, as legacy players and new companies compete for subscribers. However, while this growth is good news for many in the space, the market is becoming more competitive, and subscription-based companies are learning an important lesson: Embrace change or get left behind.
These changes are impacting a range of subscription-based companies, spanning movie streaming services, vehicles, video games and education-related products. In the November Subscription Commerce Tracker™, PYMNTS highlights the most significant changes in the market and how companies are adjusting their strategies to attract and retain consumers.
Notable Headlines From The Space
One of the biggest changes coming to the over-the-top (OTT) subscription market will arrive when Disney launches its new streaming platform.
The entertainment giant recently revealed that its new service, Disney+, will include content from several well-known Disney-owned brands, including Pixar, Star Wars and Marvel. The move is expected to cause a major shake-up for other OTT providers, as the company plans to pull its content from rival OTT services like Netflix and Hulu, leaving both scrambling to fill the content void.
Perhaps in anticipation of such a move, Netflix recently launched a discounted subscription offering for international subscribers. The new offering, currently being tested in Asia, will be a mobile-only service, available at a lower rate than the basic package and designed to help Netflix reach customers in new global markets who were previously priced out of its offerings.
The OTT market is not the only market to embrace the changes brought on by subscriptions, of course. Japanese automaker Toyota, for instance, is kicking the subscription tires with a new subscription service for its vehicle lineup. The new service, Kinto, will allow subscribers to drive different vehicles and switch them out when they want.
Toyota has joined a growing list of automakers turning to subscriptions as an alternative to vehicle ownership. In fact, by some accounts, the market is set to grow by a 71 percent compound annual growth rate (CAGR) from 2018 to 2021.
The model was designed to make it easier for consumers to gain access to a vehicle, but spare them from assuming many of the common responsibilities of ownership. This month’s Tracker™ includes a Deep Dive that explores the growth of the vehicle subscription market and the new subscription-based vehicle services that have emerged as a result.
Fighting Subscription Fatigue With Storytelling
In addition to vehicles and streaming platforms, subscriptions are being used to deliver boxes of education-based products to subscribers.
In an effort to avoid the fatigue problems that many other subscription box providers have encountered, Little Passports is focusing on character-driven storytelling to engage with subscribers each month. For the November feature story, Co-founder and Co-CEO Amy Norman explained how delivering a monthly storytelling experience goes a long way toward subscriber retention.
About The Tracker
The Subscription Commerce Tracker™, powered by Recurly, is a bimonthly report that explores how companies use subscription-based commerce to build long-term customer relationships and steady revenue sources. The report includes notable developments in the market and the companies that are rapidly innovating the space.