Hello, everyone! Mary Rosberg here. As Recurly’s Growth Evangelist, I come across the most interesting stories about subscriptions. 

As we kick off 2024, I want to take a moment to review what the past year was like for subscriptions worldwide. I have to say, it’s been a fascinating ride. Customer preferences change, market demands shift, and the only thing that prevails is industry transformation. 

Here are the stories I think are worth highlighting.

More streaming services launch ad-tiered subscription plans

As businesses seek new revenue streams, the video-on-demand industry appeals to advertising as a strategy that is paying off. The ad-supported versions for streaming giants like Netflix and Disney+ have already become as popular as their ad-free monthly versions of the service, starting at $6.99 and $7.99, respectively. 

Prime Video, for example, will now automatically include ads for all customers of its Prime membership. Consumers can get commercial-free Prime Video through a new option that costs an extra $2.99 monthly on top of Prime membership.

Amid challenging economic times, streaming companies have found a new way to drive both acquisition and retention with cheaper, convenient subscription plans. The best part? Consumers seem to be happy sitting through some ads. [Note: Not me. :)] 

Social media launch ad-free subscription plans

As Snapchat continues steadily growing its subscription offer–a service that gives members exclusive features–X has launched two subscription offerings that remove ads from users’ feeds. TikTok has also started experimenting with an ad-free subscription tier for users outside the U.S., and Meta has introduced a paid, no-ad version of Facebook and Instagram in Europe.

Advertising in social media is a lifelong strategy companies leverage to promote their product and services, especially in the direct-to-consumer (DTC) sector. However, as consumers demand a smooth experience while scrolling through their socials, the subscription model presents itself as an opportunity for social media companies to deliver a more convenient experience to users.

Travel and hospitality subscriptions are on the rise

The travel and hospitality industry constantly works to elevate customer experiences and establish long-term relationships. In February 2022, Alaska Airlines became one of the first companies to offer a monthly subscription, followed by Frontier Airlines, which launched its Go Wild pass in 2023. Yet both offer very different value to their customers. 

The adoption of subscription-based offers has emerged as a promising avenue for companies as it creates continuous, mutually beneficial relationships, promotes loyalty, and generates predictable revenue streams.

The FTC provisions for a better customer experience

The Federal Trade Commission (FTC) proposed a click-to-cancel provision to their Negative Option Rule, requiring subscription brands to make it easier for customers to cancel.

Businesses that don’t comply may face an avalanche of penalties and lawsuits. Amazon, for example, has received a suit by the FTC, alleging several deceptive practices around its Prime membership program.

In 2024, the subscriber experience will be paramount across the entire subscriber lifecycle. To remain competitive, retailers must offer comprehensive self-service experiences and a streamlined cancellation process.

Fighting subscription fatigue in the year of retention

As the industry becomes increasingly crowded with subscription offers, subscription fatigue and its resulting churn emerge as an inevitable consequence.

To fight this, several businesses are strengthening their subscription bundles by focusing on convenience, value for money, and variety of choice. The New York Times, for example, has gained 10 million subscribers as a thoughtful and calculated strategy for subscription bundling.

2024 presents a landscape where subscription flexibility is not just an option but a necessity. So, as we start the new year, here’s what to consider:

  • The shift to retention is more evident than ever, as purchasing power affects how users perceive subscription services.

  • Personalization options in plans, payments, and billing models are a must.

  • Seamless subscriber experience is crucial from sign-up to renewal to cancel. Businesses must be mindful of the convenience consumers demand and deliver it seamlessly. 

The secret to sustainable growth lies in adapting to the latest shifts in subscriber preferences. Our State of Subscriptions report examines Recurly’s data of over 2,200 brands and more than 64 million subscribers to give you the latest benchmarks and trends that will shape this year.