Data: Sustained growth in digital media subs
April 9, 2024
After streaming media subscriptions skyrocketed in 2020 as consumer behaviour shifted dramatically during a global pandemic, the industry is normalising with sustained and steady growth, according to benchmarking data from subscription management and billing platform Recurly.
Recurly’s report, Recurly State of Subscriptions: Media and Entertainment, found that the digital media and entertainment industry experienced a 124 per cent increase in subscribers since 2020, and the digital publishing industry saw a 536 per cent increase in subscribers over the same time period. Consumer appetite for these subscriptions remains robust despite a turbulent economy and cost of living increases, with savvy subscription providers turning to innovative tactics to boost customer retention and engagement and drive revenue growth.
“We’re witnessing an era of intense innovation in the digital media and entertainment subscription industry, with momentum only continuing to accelerate,” said Joe Rohrlich, CEO of Recurly. “Whether it’s watching the latest show, reading a book or catching up on the news, consumers are hungry for tailored experiences and flexible options that cater to their unique tastes. This shift is driving the industry to rethink traditional models, leaning heavily into data-driven customisation and user engagement strategies to meet the ever-evolving demands of a digital-first audience.”
Benchmarking Insights for Digital Media and Entertainment Subscriptions
Against the backdrop of an increasingly saturated market and heightened consumer expectations, the industry is pivoting towards retention strategies that emphasise long-term engagement and value. The median acquisition rate for digital media and entertainment subscriptions declined since 2020 as growth stabilised–with digital media and entertainment’s median acquisition rate at 5.8 per cent—however, the overall number of subscribers continued to grow significantly.
Key findings include:
- Subscription fatigue and increased competition is driving high churn rates as subscribers dip in and out of services based on content offerings. Digital media and entertainment subscriptions saw a median churn rate of 6.9 per cent–more than 50 per cent higher than the industry median. Still, digital publishing’s lower churn rate of 3.9 per cent is likely due to less competition and higher brand loyalty.
- Digital publishing subscriptions’ 536 per cent growth brings hope for the media industry, demonstrating the success of sophisticated subscription models that prioritise subscriber experience and value for the digital news consumer.
- The optimal subscription trial period is eight to 21 days long, with the overall trial-to-paid conversion rate for digital media and entertainment at 52.6 per cent and digital publishing at 50 per cent. However, trial subscriptions are churning higher than ever, indicating the need to prove value early on.
- Customised subscription plans and add-ons are driving significant revenue, with astronomical growth on the horizon as more subscriptions adopt creative approaches to packaging. The 13.8 per cent of digital media and entertainment subscriptions that offered customisations saw $871 million (€803m) in incremental revenue, and the 18.4 per cent of digital publishing subscriptions with customised offerings saw $5.7 million in revenue.
- Alternative payment methods (APM) are becoming more popular as a result of smoother transactions and strong security, with 79.3 per cent of APM transactions in 2023 completed via PayPal and Apple Pay usage doubling in a year to reach 15.9 per cent. Debit cards far surpassed credit cards in popularity, representing 71.8 per cent of digital media and entertainment transactions and 65.8 per cent of digital publishing transactions, compared to the 68.6 per cent industry median.