How subscription economy in entertainment benefiting consumers
"It's not Netflix that's making the changes. It's the Internet." - Reed Hastings
In the beginning decade of the year 2000, American Express came up with a successful slogan, “Membership changes everything”. These words perhaps hold truer in the current business environment as the businesses are making a shift to a new economy – The Subscription Economy, led by technological advancement and the internet.
Subscription Economy is a term coined by Tien Tzuo, a Stanford alumni and CEO of technology company, Zuora. In the subscription economy, consumers pay a membership fees or a subscription fees to access the product and service of a company. The business model that was once associated with newspapers and magazines has now been adopted by traditional and modern industries, particularly the global media and entertainment industry. Netflix, as argued by industry experts, pioneered the subscription-based business model leading to rise of several home-grown and international Over-The-Top (OTT) platforms, namely, Amazon Prime Video, Hulu, MUBI etc. This disruption has also pressured the tradition players like Disney to establish their own film streaming service.
The Global Subscription Business Market
Globally, over EUR 93 billion has been invested in companies operating in the subscription economy. It is estimated that around 28,000 companies globally are offering a service based on subscription serving both B2B and B2C markets, with offerings that may be either physical goods or services. [1]
The Internet Trend 2018 Report highlights the subscribers to be the highest in entertainment companies.
Benefits to Consumers
- Freedom from physical ownership
- Access to variety of content
- Wider choices