Home / Publications / The subscription economy
Table of contents
  1. Acquisition & investment
    1. Pre-deal due diligence
  2. Finance
    1. Revenue-based lending
  3. Regulation
    1. Contracts
    2. Consumer protection
    3. Data protection
  4. Disputes

The subscription economy

The global subscription economy is one of the great success stories of the past decade. By the end of 2021, it was estimated to be worth $650bn, with a projected value of $1.5tn by 2025.

Thanks to businesses such as Netflix and Amazon Prime Video, media streaming may be the most high-profile example of the subscription model.

Retail is another sector where subscriptions are prominent. According to  Zuora and Deloitte Digital, 37% of consumers worldwide have at least one active retail subscription – a figure expected to reach 53% by 2025.

But the subscription model is gaining ground in most consumer sectors, from automotive through health and personal care to travel.

It is also well established in the B2B arena, notably through SaaS (software as a service).

The right model

Subscriptions work best when they are win-win, offering clear benefits for both the provider and the customer. If you want to reap the rewards of the digital economy, you should take time to understand the digital landscape, and develop a position of competitive advantage, with a proposition tailored to your target market.

Growth prospects

There are some indications that the rising cost of living and heightened competition have increased churn for some subscription companies. But there is also evidence that consumers cutting back elsewhere have increased their overall spending on subscriptions for services such as pay TV and streaming. In the longer term, we should certainly expect to see more growth, innovation and consolidation, in both B2C and B2B subscription businesses.

We can also expect significantly more cross-border expansion as domestic markets mature and subscription businesses become more adept at handling issues such as scalability, cultural differences and multiple regulatory frameworks.

This edition of Bandwidth looks at some key subscription issues in more depth, including acquisitions and investment, finance, regulation and data and cybersecurity.

Key contacts

Anthony Waller
Anthony Waller
Partner
London
T +44 20 7067 3461
Charles Kerrigan
Charles Kerrigan
Partner
London
T +44 20 7067 3437
Clive Gringras
Clive Gringras
Partner
Head of TMT
London
T +44 207 067 3189
Edmund Roper
Ed Roper
Senior Associate
London
T +44 20 7067 3321
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