Currently, 89% of households in the U.S. have a streaming video service, and 32% subscribe to a streaming audio service, as reported by Parks Associates study “Subscription Memberships and Bundling: Shopping, Video, Gaming, Mobile”. Moreover, one in five internet households subscribe to a gaming service, while 16% have a gym membership. Parks Associates research revealed a continued wave of subscription service uptake among U.S. households, led by streaming video, retail memberships, and streaming audio.
“The evolution of hardware to a service model and demand to drive engagement and loyalty for brands through apps are driving the rise of subscription services,” said Jennifer Kent, Vice President, Research, Parks Associates. “On the streaming audio side, market leader Spotify’s premium adoption is as high as that of Discovery+, the ninth highest video OTT subscription service.”
Beyond video, retail, and transportation, many categories see large jumps in adoption once household annual income passes $100,000, while many subscription categories see adoption drop-offs after age 45. These households can absorb the high prices for gaming and fitness services, and they prioritize convenience over cost (meal kits, kid/baby subscriptions, delivery service memberships), which adds emphasis to the user experience.
Categories that provide entertainment (music, gaming) and convenience (child/baby, meal service) fare particularly well in terms of customer loyalty. Most categories achieved positive NPS (20+), with even high-priced services (gaming, meal kits) receiving high marks. Internet and traditional pay-TV providers, which traditionally have subpar NPS, can benefit from partnering with – or bundling in – services that garner higher customer satisfaction and loyalty.
“Competitive pressure will force market challengers to forge stronger ties, e.g., Walmart Plus and Paramount Plus. Subscription bundlers should seek offerings that span entertainment, productivity, and convenience,” Kent concluded.
Related News
