After streaming media subscriptions skyrocketed in 2020 as consumer behavior shifted dramatically during a global pandemic, the industry is normalizing with sustained and steady growth, according to new benchmarking data from Recurly.
Recurly, a leading subscription management and billing platform, found that the digital media and entertainment industry experienced a 124% increase in subscribers since 2020, and the digital publishing industry saw an explosive 536% 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 customization 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 emphasize long-term engagement and value. The median acquisition rate for digital media and entertainment subscriptions declined since 2020 as growth stabilized–with digital media and entertainment’s median acquisition rate at 5.8%—however, the overall number of subscribers continued to grow significantly.
Key findings and insights from 2023 subscriber benchmarking data 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%–more than 50% higher than the industry median. Still, digital publishing’s lower churn rate of 3.9% is likely due to less competition and higher brand loyalty.
- Digital publishing subscriptions’ 536% growth brings hope for the media industry, demonstrating the success of sophisticated subscription models that prioritize 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% and digital publishing at 50%. However, trial subscriptions are churning higher than ever, indicating the need to prove value early on.
- Customized 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% of digital media and entertainment subscriptions that offered customizations saw $871 million in incremental revenue, and the 18.4% of digital publishing subscriptions with customized offerings saw $5.7 million in revenue.
- Alternative payment methods (APM) are becoming more popular due to smoother transactions and strong security, with 79.3% of APM transactions in 2023 completed via PayPal and Apple Pay usage doubling in a year to reach 15.9%. Debit cards far surpassed credit cards in popularity, representing 71.8% of digital media and entertainment transactions and 65.8% of digital publishing transactions, compared to the 68.6% industry median.
For additional benchmarking data, predictions and best practices within digital media, entertainment and publishing, view the Recurly State of Subscriptions: Media and Entertainment report.
As an established partner to market-leading brands, Recurly dedicates itself to sharing insights to increase subscriber lifetime value. The Recurly 2024 State of Subscriptions report epitomizes this partnership by helping its customers grow with insights from more than 60 million unique subscribers. For companies eager to learn more, please visit recurly.com.
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