Subscriptions and recurring payments are set to grow in size post COVID-19
This report provides insights into the current state and developing trends of the subscriptions and recurring payments industry across the globe and in North America specifically. The publication reveals that due to the pandemic in 2020, consumers realized benefits of such purchasing methods and the practice is here to stay post-COVID-19.
Amid COVID-19, consumers worldwide realized benefits of subscriptions and increasingly adopted them
Globally, after the onset of the COVID-19 pandemic, around two-fifth of consumers subscribed to new products and services to adapt to the changing situation, and despite the economic downturn, just a low percentage of consumers cancelled or downgraded their existing subscriptions. Moreover, consumer spending on the top one hundred subscription applications rose by at least 30% globally, and by over 25% in the United States. With that, many online enterprises are finding the benefits that subscription purchasing agreements provide, such as revenue predictability, which in turn improves future business planning.
However, before incorporating subscriptions into their profile, companies have to choose an appropriate business model. So-called “Subscription Box” is one of the most popular ones to date, but there are also some other that may be even more suitable for certain firms. Additionally, it is also essential to learn which metrics to consider when evaluating subscriptions; one important metric is customer lifetime value.
Subscriptions spiked in the United States in 2020
In the United States, between 2019 and 2020, the subscriptions market revenue rose by over 25%, and as during the pandemic and the trend is clearly here to stay post-COVID-19. When it comes to the product and service categories, especially pronounced was the market growth rate in the sector of consumer retail products and digital media, as subscription services account for well over half of music industry revenue. Among the subscription service providers, free trials, appeared to be uncommon though the top 30 performers in the industry realize the importance the most. Furthermore, among the payment service providers offering recurring payments for subscriptions in the United States, Square and PayPal stood out in a recent assessment of PSPs.
Report Coverage
This report covers subscriptions and recurring payments markets in North America, including United States and Canada. The report contains relevant information about the current state of the markets in the region, market trends, subscription sales and shares, and consumer and business preferences. Not all types of information were included for each country, due to varying data availability.
Report Structure
- The report opens with a global chapter. It includes information on the global subscription and recurring payments market development and projections, top market trends, consumer choices and other relevant data points.
- In addition to market data, the global chapter also includes information on the various subscriptions business models, their benefits, and well as key metrics to consider when offering subscriptions to customers.
- The rest of the report is devoted to countries of North America, namely United States and Canada. Depending on data availability, the following types of information were included: market revenues, consumer spending, penetration rates, key types of subscription, subscription providers, recurring payment service, providers, etc.
Please note: For this report, the purchase of an Enterprise license allows up to ten worldwide users of an organization access to the report
Table of Contents
1. Management Summary
2. Global Developments
- Subscription Market Sales, in USD billion, and Year-on-Year Change, in %, 2020 - 2025f
- Consumer Spending in Top 100 Subscription Applications, by App Store and Google Play Store, in USD billion, 2019 & 2020
- Key Metrics for a Subscription Business, October 2020
- Key Benefits of a Subscription Business, October 2020
- Top E-Commerce Subscriptions Business Models, November 2020
- Top Purchased Subscription Categories, in % of Respondents, May 2021
- Frequency of Adding a New or Renewing Existing Subscriptions, in % of Respondents, May 2021
- Top Purchased Subscription Categories, in % of Respondents, May 2021
- Top Factors When Choosing a Subscription, in % of Respondents, May 2021
- Preferred Payment Methods for Subscription Contracts, in % of Respondents, May 2021
- Share of Respondents Who Prefer Automatic and Manual Subscription Renewals, in %, May 2021
- Breakdown of Preferred Pricing Models, in % of Respondents, May 2021
- Top Reasons to Cancel Subscriptions, in % of Respondents, May 2021
- Annualized Subscription Economy Revenue Growth Compared to the S&P 500 Revenue Growth, in %, Q4 2019 - Q4 2020
- Annualized Subscription Economy Average Revenue Per Account Growth Rate, in %, Q4 2019 - Q4 2020
- Payment Options Available for Recurring Payments, by B2B and B2C Companies, in % of Payment Decision-Makers, September 2020
- Technologies Used to Handle Recurring Payments, in % of B2B and B2C Payment Decision-Makers, September 2020
- Percentage of Customers with Failed Payments that Turned into Churn, by B2C and B2B, and B2B Only Companies, in %, September 2020
- Implications for B2B & B2C Businesses from Recurring Payments Fails, in % of Payment Decision-Makers, September 2020
- Investment Plans Regarding Recurring Payment Service Providers, in % of B2B and B2C Payment Decision-Makers, September 2020
- Benefits of Adopting a Recurring Payment Solution, in % of B2B & B2C Payment Decision-Makers, September 2020
3. North America
3.1. United States
- Paid Subscriptions Market Revenue, in USD billion, 2019 & 2020
- Consumer Spending in Top 100 Subscription Applications, by App Store and Google Play Store, in USD billion, 2019 & 2020
- SVOD Revenue, in USD million, 2019 & 2020e & 2025f
- Share of Adult Consumers Who Have Select Types of Subscriptions, in %, February 2020 & July 2020 & February 2021
- Features That Subscription Merchants Provide, by Provider’s Index Score, incl. Top 30, Middle, and Bottom 30, in %, February 2021
- Limited Tier Paid Subscriptions Market Revenue, in USD million, 2019 & 2020
- Share of Paid Subscriptions, in % of Total Music Retail Revenue, 2020
- Annual Average of Paid Music Subscriptions, in millions, and Y-o-Y Change, in %, 2016 - 2020
- Number of Streaming Services in Use, in % of Adults, April 2020 & December 2020
- Per Month Average Payment for All Streaming Services Combined, in USD, April 2020 & December 2020
- Average per Month Spending for Subscription Services, in USD, by Age Group, September 2020
- Top 7 Streaming Services Subscribed or Have Access to, in % of Adults, April 2020 & December 2020
- Subscription and Select Internet Activity, in % of Consumers, February 2021
- Top Payment Processors for Recurring Payments, incl. Overall, Pricing & Contract, Recurring Payment Types, General Features, and Expert Scores, May 2021
- Top Payment Processors for Recurring Payments, incl. Pros, Cons, and Recurring Payment Features, May 2021
3.2. Canada
- Share of Respondents Who Has Subscriptions for Physical Goods, in %, March 2021
- Share of Consumers Having Certain Number of Subscriptions, in %, April 2020
- Estimated Change in the Number of Subscriptions in the next 12 Months, in %, April 2020
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Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Amazon
- Apple Pay
- Disney
- Google Pay
- HBO
- Hulu
- JustFab
- NatureBox
- Netflix
- PayPal
- PaySimple
- QuickBooks Payment
- Square
- Stax
- Stripe
- Thrive Market
- Wave
- YouTube
