Subscription Economy

Let's face it. We live in a subscription economy. The pandemic locked us in our homes and held us back from going out and seeing films or going out to restaurants. All of this fed the subscription economy. For example, food delivery and online film services grew in popularity during the national quarantine. All of this growth came because of the pandemic.

Disney+ more than doubled in revenue from Q1 of 2020 to Q3 of 2021 and is still growing, according to BusinessOfApps.com. Forbes said last year that there were almost fifty streaming services in America—and that number could just continue to rise. With all of these streaming services expanding to the world wide web, you could say that the film industry is becoming a subscription industry—but other industries are following suit.

With retail stores realizing that it would be nearly impossible to sell, they began to rely on customers joining monthly box programs. These subscriptions would deliver boxes to the customer's door with new things to try—like makeup, food and clothing. According to SaveMyCent.com, the subscription box industry revenue grew from $57.0 million in 2011 to $2.6 billion in 2016, and an IMARC study showed that the industry grew to $18.8 billion in 2020. This growth came during the pandemic from consumers that were stuck in their homes and wanted to try new things without leaving their homes. People weren't going out and wore casual attire, especially since most people were working from home. Some customers probably wanted the opportunity to receive new things rather than having to pick new things. A great example of subscription box services is HelloFresh—which delivers fresh meals to your doorstep.

Services like Amazon and Costco destroy the competition using the subscription model. Costco made nearly $4 billion in 2021 from its member subscription, and Amazon made $12 billion from its prime subscription. Not to mention that paying a yearly subscription typically makes people feel obligated to shop at the store because they already paid for usage and want to get the best out of their membership. That is why many successful companies have either applied this to their model or are adding it now.

The only bad part about the subscription economy is how easy it is to unsubscribe. While many companies stay faithful to their subscription plan—like Amazon when they raised their price on February 18th, 2022, up 16%—some brands have seen abrupt dips in growth and subscriptions. Disney+ saw a drop in growth in Q3 of 2021 because it's physically impossible to constantly release content that is attractive to all of its subscribers. While the subscription economy is strong and still growing, it is volatile because most services grant customers the ability to unsubscribe easily.