COVID-19 and Subscription Businesses
To understand how COVID-19 is impacting subscription businesses for the purposes of writing a blog post.
- 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.
- 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.
- Consumer IoT and small business software only grew at 50% the rate they did in 2019.
- Membership subscriptions grew at just two-thirds the rate it did in 2019.
- Subscription businesses that are seeing their growth contract are those in the travel and hospitality and sports-related services industries.
- 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).
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