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Gen Z's Fickle Subscription Habits: A Double-Edged Sword for Subscription Services

New insights reveal Gen Z’s unique subscription patterns, giving brands crucial information on how to retain this challenging demographic.

SAN FRANCISCO – Aug. 29, 2023 – As streaming services and other subscription-based brands jostle for market space, new research highlights an unexpected challenge: the unpredictable subscription habits of Generation Z. Recurly, a leading subscription management and billing platform, today announced the release of its report, Boomers to Gen Z: A Guide to Subscriber Preferences, revealing the generational differences in consumer behavior from more than 6,500 subscribers in six countries. 

Findings reveal Gen Z subscribers are significantly more likely to cancel a subscription in the first year than other demographic groups. And while many subscription services have recently hiked their prices, Gen Z, unlike their Boomer counterparts, is not primarily driven by cost concerns. In essence, Boomers are more price-sensitive and prioritize deals and cost savings. Gen Z is looking for a tailored experience–and is willing to pay for it.

“While Gen Z is apt to cancel, they’re also quick to sign up. We don’t see that they stop watching streaming services—they simply appear to move around more frequently than other generations,” said Theresa McEndree, CMO at Recurly.

Key findings include:

  • Only 37% of Gen Z maintained all their subscriptions over the past year, compared to a whopping 79% of Boomers.

  • 42% of Gen Z canceled one to three subscriptions within the same period, in stark contrast to 18% of Boomers.

  • While 54% of Boomers will cancel a subscription if there is a price hike, only 27% of Gen Z share this sentiment.

  • If unexpected fees are added to a subscription price, 86% of Boomers would say goodbye, but for Gen Z, that number drops to 58%.

  • 29% of Gen Z noted that if a subscription service can truly meet their needs and preferences, they'd stick around for another four to six months. In comparison, only 11% of Boomers felt the same. While Boomers are on the lookout for value-for-money and will switch if they find a more affordable alternative, Gen Z and Millennials lean towards services that offer personalization and flexibility in their subscription plans.

“Retention is no longer a continuous line. Rather than focusing on retaining the existing subscription, consumer brands should think more about retention of the long-term relationship via easy pause and win-back strategies,” said McEndree. “By giving Gen Z the flexibility to come and go with ease and providing enticing reasons to return, brands can transform a fickle relationship into a lifelong connection.”

Survey findings are based on an internet-based survey conducted by Recurly and Censuswide in May 2023. The sample size included over 6,400 global respondents, age 18 years or over, who currently subscribed to two or more subscriptions. 

For more information or to download the report, visit Recurly.

About Recurly

Thousands of innovative companies across digital media, streaming, publishing, SaaS, education, consumer goods, and professional services industries rely on Recurly to unlock transformational growth using subscriptions. Recurly’s all-in-one, integrated platform removes the complexities of automating subscription billing at scale by enabling teams to manage and optimize their subscriber lifecycles with ease. Category-defining companies including Sling, Twitch, BarkBox, FabFitFun, Paramount, Lucid, and Sprout Social have chosen Recurly to manage billions of dollars in recurring revenues, future-proof their recurring billing and revenue management, and recover billions of dollars in lost revenue due to churn. Founded in 2009, Recurly is based in San Francisco, with offices in Boulder and London. For more information, visit Recurly.

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