Advanced Television

Report: Retention beats acquisition in subscription trends

January 16, 2025

Recurly, a specialist in the subscription management and billing platform, has released its ninth annual State of Subscriptions report. The report analyses data from millions of consumers providing deep insight into the subscription economy’s evolution. This report offers strategies and solutions for merchants to overcome the industry’s ever-evolving nature and subscription challenges to drive growth.

In a year when subscriber acquisition rates dropped to 2.8 per cent (down from 4.1 per cent in 2021), retention has emerged as the cornerstone of subscription success. Strategies like personalised engagement, flexible payment options, and loyalty incentives are no longer optional – they are essential to thriving in this dynamic market.

“This data underlines why more and more businesses across industries from travel to fashion are turning to subscription models,” said Joe Rohrlich, CEO at Recurly. “Even as customer acquisition declines, retention is increasing – a clear sign that consumers want to find and stick with subscriptions that best fit in with their lives. Every subscriber wants to be treated to the most personalised experience possible, and the onus is on businesses to provide products and services that create best-in-class customer experiences.”
Some of the top findings from the report include:
  • The shift to retention: Acquisition rates dropped from 4.1 per cent in 2021 to 2.8 per cent, signaling the continued shift toward profitable growth. Subscription businesses continue to focus on cost effective acquisition strategies while improving churn through subscriber engagement and loyalty.
  • Declining free trial effectiveness: Free trial conversion fell from 46 per cent to 33 per cent. The focus is shifting to attracting high-quality subscribers, as increasing market penetration in many industries has decreased the effectiveness of free trials.
  • Subscriber expectations evolving: Consumers demand flexibility—preferred payment methods, diverse plan options (both recurring and one-time), frictionless plan changes, and custom bundles.
  • Cancellation isn’t goodbye: Subscriptions are cyclical, with 20 per cent of acquisitions being returning subscribers. Over $200 million was generated from subscribers who re-subscribed after pausing. Businesses offering a pause option saw 25 per cent of subscribers pause instead of canceling.
  • Fraud and Alternate Payment Methods (APMs) on the rise: Fraudulent transactions increased by 29 per cent, mainly targeting the sign-up flow and credit/debit cards. There was also a 19 per cent year-over-year (YOY) increase in alternative payment method (APM) usage, which helps mitigate this risk while aligning with consumer preferences.
“Success in 2025 depends on subscriber experience and deepening loyalty by integrating flexibility and personalisation into every step of the customer experience journey,” said Taylor Putnam, Principal Commercial Product Manager at Alaska Airlines.
Subscription offerings aren’t new, but brands like Alaska Airlines, Paramount+, FabFitFun and more are increasingly recognising the value of subscriptions and are using these models as a way to ensure their businesses stay profitable and sustainable. Recurly’s data shows that 58 per cent of consumers have subscribed to one to three services in the past year. It’s clear that there is a healthy demand for more businesses to adopt subscription models.
“Recurly’s integrated billing and payment options have allowed us to focus our resources where they matter most: delivering value to our students,” added Bryan Gregory, Director Of Engineering at Chegg.

Categories: Articles, Markets, Premium, Research

Tags: , ,