Gartner predicted that by 2020, all new entrants and 80 percent of historical vendors were offering subscription-based business models, regardless of where the software resides. Subscription business models are attractive to companies for obvious reasons. One of the biggest reasons is it provides for annuity-like revenue streams that are highly predictable. With predictable revenue, companies can invest in operations and innovation. But signs are emerging that the boom times for subscription-based services might actually be nearing an end as they flood the market, known as subscription fatigue.
What is subscription fatigue?
Subscription fatigue is an anxiety customers get from the ever-accumulating monthly costs of maintaining subscriptions to all kinds of things, from streaming services and membership sites. Patrick Campbell described this phenomenon as “the potential tiring of consumers of signing up for an increasing number of subscription businesses”.
Let’s reflect on our everyday life as an example. How many sites or videos are you subscribing to? How often do you open those monthly, weekly, or daily subscriptions? You might even have subscribed to a few sites that you already forgot. Or, you might find yourself abandoning some of your subscriptions because you never access those sites anymore. Whichever the reason is, this feeling you get is called subscription fatigue.
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The phenomenon of subscription fatigue
Deloitte’s annual Digital Media Trends survey found that the proliferation of subscription streaming services, and the fragmentation this has created, is now a major problem for many consumers. Specifically, the global consulting firm found that nearly half (47 percent) of consumers it polled are frustrated by the growing number of streaming services they need to subscribe to in order to access the content they want.
On the contrary, Greeson’s report also cited that only 10 percent of US subscribers thought that they had subscribed to too many services and were likely to cancel one soon. In fact, 66.5 percent of the survey respondents thought that they had just enough video subscriptions as they subscribed to only sites they wanted, meaning they did not feel any fatigue.
Nonetheless, whether subscription fatigue is overrated or not, there is still no clear answer for that, said Greeson. It depends on the individuals; how they feel about the products or services they have subscribed to. For instance, for someone who has just started subscribing to a site, subscription fatigue is out of the question. For those who pay for multiple products and/or services for a subscription, this phenomenon could just creep their life.
What should businesses do?
This phenomenon might not be the brightest ray of light in the subscription service landscape, but it could be a good opportunity to learn for businesses. Subscription businesses that want to see success in the coming years need to remember that they will be fighting for priority. The more unique or needs-based a subscription service is, the more likely it is to make it onto consumer’s shortlist.
In addition, business leaders or entrepreneurs can invite subscription leaders. Subscription leaders can help foster “subscription delight” instead of fatigue. They are experts in providing insights on how subscribers behave and thus providing better, more meaningful newsletters, product updates, etc. to your subscribers.
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