Media subscriptions, including magazines, newspapers and digital only publications, are growing by three times the normal subscriber acquisition rate according to Zuora’s new global Subscription Impact Report: COVID-19.
Subscription software provider Zuora has released the Subscription Impact Report: COVID-19, highlighting the impact that the spread of coronavirus has had on subscription-based businesses around the world.
For the past three years, Zuora has published a report on the collective health of the subscription economy, The Subscription Economy Index (SEI), which provides a long-term view to determine the “sustained and predictable returns of recurring revenue models”.
The SEI has found that over the last seven and a half year, subscription revenue has grown by more than 350 per cent due to the growth in recurring revenue-based business models.
Narrowing Zuora’s analysis, the Subscription Impact Report: COVID-19 focuses on early trends of how COVID-19 has impacted subscription growth between 1-31 March 2020, compared to the previous 12 months (February 2019 to February 2020).
The Subscription Impact Report: COVID-19 findings
In an analysis of hundreds of subscription-based companies, Zuora has found that more than half (53.3 per cent) have not seen an impact on their subscriber growth.
In fact, 22.5 per cent are seeing subscriber acquisition rates accelerate at a faster rate than before the COVID-19 pandemic.
Of the companies who are seeing subscriber acquisition slow (24.2 per cent), half of those are still growing their subscriber base (12.8 per cent).
The impact of COVID-19 on media subscriptions
Zuora has identified that digital news and media subscriptions show a trend of accelerating growth, growing by three times the normal rate.
Within the report, ‘digital news and media’ is defined as B2C hybrid services (print magazines, newspapers and articles) and digital offers as a service (digital magazines, mobile publications).
“With news changing day-by-day, there is an increase in demand for up-to-date information, resulting in sign-ups for digital news subscriptions,” the report states.
The report notes that the growth rate of digital news and media subscriptions has been impacted by many news websites temporarily taking down their paywalls to offer a subset of news for free.
“As the COVID-19 crisis shifts consumer behavior and market demands, companies in the “accelerating” segment have had to quickly scale their systems to meet higher demands. Additionally, many companies began offering free trials or testing new acquisition tactics to capture a wider audience and draw the attention of new subscribers.”
“Successful companies today are focused on adapting to this rapid pace of change, deciding to focus on growing and monetising a loyal customer base.”Subscription Impact Report: COVID-19, Zuora.
Australian Circulation Consultant Bruna Rodwell recently highlighted Australian print magazines that have changed their subscription marketing tactics since the outbreak of COVID-19 to increase subscriptions.
The subscription business shift
Zuora says that in working with its customers and the wider subscription community, it’s identified four common business responses to the COVID-19 challenge.
- Subscription companies are able to focus on optimising for long-term customer lifetime value
- Companies that provide the option to pause subscriptions build trust and reduce churn
- Subscription companies are well-placed to pivot quickly to offer new services and promotions if required
- Companies experiencing accelerated growth are often offering free trials as goodwill and a tool to reach a broader audience for future lead-generation.
“For existing subscription businesses, the data shows that the recurring revenue built on the loyalty of their customers will help them weather this storm. For all other companies, there is more urgency than ever before to rediscover their customers, shift to subscriptions, and discover the power of the recurring revenue model,” Zuora says.
The full Subscription Impact Report: COVID-19 is available on Zuora’s website.