The global subscription economy is set to grow to $275bn in 2022; rising from $224bn in 2021, as the model takes off in physical goods, as well as music and video.
After evaluating 10 key subscription-based markets, researchers at Juniper Research have identified that physical goods will account for the largest subscription revenue opportunity and are expected to represent 45% of the global revenue by 2022.
The report confirmed that physical goods subscriptions have seen increased user demand, with users keen to secure reliable sources of medicines and daily essentials in the face of the pandemic.
Additionally, the report found that subscriptions to digital services, including music, video streaming, spoken word, and video games, will be a major revenue stream; representing 39% of global subscription market value in 2022. It predicts that increasing adoption of emerging new device types, such as smart speakers, and the increased availability of streaming content will drive further adoption.
The report, Subscription Economy: Future Strategies & Market Forecasts 2022-2026, also found that increased user demand for reliable, recurring deliveries of key items, owing to the Covid-19 pandemic, and the support of automation in subscription services, are key reasons for the uptake of subscription services across these three verticals; representing 75% of global subscription market revenue in 2022
]The study established that support for alternative payment methods is key to growing future subscription-based services. In turn, it urges subscription economy vendors to support multiple payment methods, including Open Banking and digital wallets, to boost convenience to the end user.
Juniper Research recommends that platform providers should focus on the most popular alternative payment methods in their target countries, in order to minimise payment process friction, and so reducing churn.