Payments as a powerful subscription growth strategy
Welcome back to Subscriptions Weekly! Insights, news, and great content from the subscription industry–all in one place.
In this issue, we review the payment and growth strategies subscription businesses must follow to scale in 2023. We check on the Q4 2022 earnings from Amazon Prime and Warner Bros. Discovery, Netflix’s price cut in international markets, how U.S. restaurants drive loyalty with subscriptions, and Spotify’s pilot for NFT-gated playlists.
2023 is the year of payments
For both businesses and individuals, faster and more secure ways to make and receive payments are a top priority–especially in subscriptions, where consumers seek and demand convenience.
The desire for real-time payments is in tension with the rising threat of fraud, and alternative payment methods are one of the most effective ways to manage fraud better. As of October 2022, PayPal is the most used APM globally, accounting for 18.4% of total transactions and 91.9% of all transactions made with APMs. Additionally, payments via credit cards and APMs experience lower churn rates than debit card payments.
By diversifying their payment options, subscription companies can have greater control over their involuntary churn rates. A balanced mix of several payment methods and a thoughtful payment experience make subscribers more likely to convert.
Learn more trends and strategies in The 2023 State of Subscriptions, the report that sets you up for success in acquisition, growth, churn, and payments.
Subscription-based businesses: Five lessons for marketers
Successful subscription-based businesses have customers on speed dial and access to recurring revenue, creating an infrastructure where commerce and loyalty converge.
How can marketers continue to drive retention, scale, and create powerful subscription experiences? Recurly’s CMO, Theresa McEndree, shares her takeaways:
Explore complementary brand relationships
Create an intentional journey to increase loyalty
Offer promotions, free trials, and ramp pricing
Experiment with pricing, plans, and payments
Don’t overlook the importance of remarketing
Amazon: Playing the long game on Prime subscriptions
The retailer reported 17% YoY revenue growth, the highest rate in the last four quarters. The renewal rate for Prime membership is quite high, and there hasn’t been a significant decline in retention rates despite price increases–more than 60% of U.S. households have a Prime membership. Read more on Seeking Alpha.
Warner Bros. Discovery tops 96 million subscribers
HBO, HBO Max, and Discovery+ added 1.1 million subscribers in Q4–ending 2022 with 96.1 million subscribers worldwide. Direct-to-consumer revenue was $2.45 billion, and though it saw a loss of $217 million, it was a $511 million improvement in losses year-over-year. Learn more on Variety.
Netflix cuts prices in 30 countries to boost subscriptions
As the video streaming giant looks to maintain subscriber growth amid stiff competition and strained consumer spending, the brand announced the cut of subscription prices for certain tiers in some Middle East, sub-Saharan African, Latin American, and Asian markets. Read more on Reuters.
More restaurants try subscription programs
From unlimited drinks to free delivery to appetizers, the “pay-per-chew” trend is becoming more common in the U.S. Both large restaurants and neighborhood hangouts are increasingly experimenting with subscriptions to ensure steady revenue and customer loyalty. Learn more on The Associated Press.
Spotify tests playlists that only NFT holders can unlock
Spotify is testing token-gated playlists in specific geographies. Under the pilot, Kingship, a metaverse band signed to Universal Music Group, has released a special playlist that could be accessed only by Kingship key card NFT holders. Learn more on TechCrunch.
Join Recurly at these exciting events
On-demand: 5 critical revenue recognition must-haves for subscription businesses. You can’t manage subscriptions at scale without getting revenue recognition right. Recurly finance experts discuss the challenges of accounting for recurring revenue. Watch now.
On-demand: The 2023 State of Subscriptions webinar. Set your team up for success with insights from more than 2,200 global brands. Learn the upcoming industry trends and consumer demands. Watch now.
On-demand: How to accelerate subscriber growth & revenue in 2023. Hear from Oscar Wall, Recurly EMEA General Manager, and Jonas Åström, Recuro Founder and CEO, as they discuss the macroeconomic landscape affecting the subscription economy and break down strategies to maximize revenue growth in 2023. Watch now.
From the Recurly blog
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