COVID-19 and Subscription Businesses

Goals

To understand how COVID-19 is impacting subscription businesses for the purposes of writing a blog post.

Early Findings

Resilient

  • According to the Subscription Impact Report, subscription businesses are so far proving resilient during the COVID-19 pandemic.
  • The report analyzed "hundreds of subscription-based companies" and more than half have not seen any disruption to their subscriber growth.
  • Of the companies that have seen their growth slow, they are still growing, just at a slower pace.
  • In fact 53.3% of companies have seen limited impact from COVID-19, 22.5% have seen their growth accelerate, 12.8% have seen their growth slow, and just 11.4% have seen their growth contract.

Specific Sectors

  • Subscription businesses that are generally seeing accelerated growth are OTT video streaming, digital news and media, e-learning, telco and utilities, and communications software businesses.
    • The subscription rate for OTT video streaming companies grew seven times in March 2020 compared to a year earlier.
    • Digital news and media subscriptions grew three times over 2019 rates.
    • E-learning subscriptions grew 2.9 times over 2019 rates.
    • Telco and utilities subscriptions grew 1.75 times over 2019 rates.
    • Communications software grew 1.4 times over 2019 rates.
  • B2B and B2C software and information services that operate on a subscription basis are seeing limited impact from COVID-19.
  • Consumer IoT, business IoT software, small business software, and memberships have seen their subscription growth slow during the crisis.
  • Subscription businesses that are seeing their growth contract are those in the travel and hospitality and sports-related services industries.

Other Data

  • A Brightback webinar that was presented to an audience of subscription-based business leaders found that 69% of the attendees stated that their churn rate had been impacted by COVID-19.
  • Additionally, 13% said they had halted all growth initiatives during the crisis.
  • Average daily cancel volumes increased by 50% during March 2020, but some days the increase was as much as 166%.
  • In-person subscriptions are suffering the most, but "isolation-friendly" subscription services are thriving (meal delivery, video streaming, home fitness).

Proposed next steps:

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