Wow is the only word we can use to describe 2020 that doesn’t begin with “un” – unprecedented, unexpected, unfathomable, unbelievable, unmatched. No one could have predicted what 2020 would hold and, so far, 2021 is a bit iffy if the pandemic and politics are any indication. However, we remain optimistic about the continued success of the subscription economy, as people move away from the desire to own things and toward filling their wants and needs through subscription products, services, and experiences. Here are our subscription predictions for the coming year.

Streaming video subscription services

The major players

The last 14 months have been big for the streaming video industry with the entrance of Disney+ and Apple TV+ in November 2019, Peacock TV in April 2020, and HBO Max in May 2020. Hands down, Disney+ has been a runaway success, amassing 73.7 million subscribers by the middle of the fourth quarter of 2020, well ahead of their goal of reaching 60 to 90 million subscribers by 2024. The jury is still out on Apple TV+. Though its programming has won awards, Apple hasn’t released the number of paid subscribers. They’ve also offered year-long free streaming subscriptions to the purchasers of certain Apple products, which would likely skew any paid subscriber numbers.

The pandemic fueled exponential growth for Netflix, growing their subscriber base to 195.15 million paying subscribers worldwide as of September 30, 2020, a 23.3% increase over the third quarter of 2019. Peacock TV and HBO Max seem to be doing well, too, though their viewership numbers don’t translate directly to actual streaming subscriptions. In December, The Wrap reported that Peacock had 26 million sign up for Peacock but, with a free tier, we don’t know how many actually pay for the service. Last month, CNBC reported HBO Max had 12.6 million activated users, but some HBO customers got access to HBO Max for free so, again, viewership does not necessarily translate to subscriptions.

(Amazon) Prime Video is also a major player, but we didn’t see a lot of change from them in 2020. Prime Video Channels is a landing spot, or dashboard of sorts, for other services, so subscribers can go to one place to access many different streaming services as add-ons for an extra subscription fee. The options include BritBox, Sundance Now, Showtime, Starz and Shudder.

Market US reports that, as of January 2020, Amazon Prime Video had over 150 million users, and Amazon Prime had over 100 million users globally. If those figures are accurate, it seems that Amazon either does still offer the standalone subscription option, or those who signed up just for Prime Video when it was offered as a standalone service were grandfathered in.

Business model changes

The biggest changes we saw to the streaming video market last year were to the subscription business model, including price increases, the discontinuation of free trials, tiered subscriptions, and premium pricing for specific content. In terms of pricing, Disney+, Hulu, ESPN+, Netflix and YouTube TV have either implemented or announced price increases. The costs for content acquisition are high and, as the pandemic showed us, the streaming services have a captive audience. Disney attempted to recoup some of its costs by charging an additional cost for premium releases like “Mulan.”

In 2020, Disney+, Netflix and HBO Max all discontinued free trials. Disney+ and HBO Max canceled their free trials outright while Netflix still offers a handful of shows for free as a sneak peek. Essentially, streaming video viewers have to be ready to commit when signing up for these services.

Another popular business model change last year was the addition of streaming video tiers. Netflix was one of the first to offer tiers. Though none of Netflix’s tiers are ad-supported, they do offer several plans and price points, appealing to the budget conscious as well as those who want the best quality possible and want to be able to watch Netflix on multiple screens simultaneously. When Peacock launched, they offered three tiers: a free ad-supported tier (a good option if you don’t mind seeing Jake from State Farm and Target ads multiple times during one program), a premium tier with limited commercials, and an ad-free tier.

What to expect in 2021

According to Ampere Analysis, through the first quarter of 2020, the average U.S. household subscribed to 3.8 streaming video services. Despite this, streaming video subscription services are competing for attention against similar services as well as other types of entertainment, including gaming, social media, and other pursuits. With similar pricing, the major services will jockey for position by offering exclusive content (e.g., The Office is now only available on Peacock), niche content (e.g., Discovery+ for nonfiction content, Disney+ for family-friendly content, ESPN+ for sports, etc.), live TV along with movies and TV (e.g., Hulu + Live TV, Sling TV, YouTube TV), and user experience. To some extent, pricing becomes a factor when viewers want more services at a lower cost. HBO Max has already hopped on this bandwagon, announcing they are working on an ad-supported tier to be launched later this year.

Other subscription predictions for 2021 include simultaneous debuts of feature films in theatres and on streaming services. HBO Max was the first to announce this change to their business model, starting with the Christmas Day release of “Wonder Woman 1984” which was released in theatres and on their streaming service the same day. For the time being, WarnerMedia has said that it will not charge an extra fee for fans who choose to watch the movie premiere on the streaming service rather than see it in the theater.

Streaming audio subscription services

The streaming audio and podcasting market had a big year last year with lots of posturing and positioning. According to Statista, in 2020, there were an estimated 103 million monthly podcast listeners in the United States. That number is expected to grow to 120 million in 2021. With Joe Rogan, Bill Simmons and Prince Harry producing podcasts, the streaming audio format continues to grow in popularity across the country. As a result, we’re seeing companies like Spotify, Amazon and SiriusXM grow their podcasting content catalogs by acquiring smaller podcast publishers as well as complementary services. We expect that trend to continue into 2021 with additional acquisitions and contraction of the podcast marketplace.

Spotify, for example, acquired Anchor FM and Gimlet Media in February 2019, Parcast in March 2019, Bill Simmons’ The Ringer in February 2020, and Megaphone in November 2020. Amazon, who owns Audible audiobooks, just got into podcasting in September 2020. Last week, the company announced its acquisition of Wondery which will exponentially grow Amazon Music’s podcast content catalog. SiriusXM, which produced podcasts before podcasting was cool, acquired podcast platform Stitcher in July, adding more than 100,000 podcast titles to its library.

What to expect in 2021

Our subscription predictions for streaming audio including a contraction of the market which could include players dropping out and selling their content to larger podcast publishers or the publishers buying the companies outright to acquire their subscribers. Luminary, founded in April 2019, comes to mind. In May, Bloomberg reported that Luminary was losing money, and it only had about 80,000 paid subscribers. They are ripe for the picking.

Another we expect to see is podcast publishers differentiating themselves through the variety and exclusivity of their content. Sure, they want to appeal to the largest audiences possible, but not every company can attract Prince Harry and Meghan Markle. Spotify sure did. They signed the royal couple to an exclusive deal with their new Archewell Audio podcast. The podcast launched in December, and it will feature unique stories from different perspectives and voices to help people better understand each other. This type of content, along with Bill Simmons’ The Ringer are pure gold in the podcast world, and services will attract advertisers and subscribers by being able to offer this type of in-demand talent.

With podcast publishers purchasing complementary services, we expect user experience to play a role in who wins and who loses this year. Podcast fans want to be able to find their favorite podcasts easily, to subscribe to the latest episodes, and to be able to listen to the podcasts on their favorite devices which would, ideally, sync so if they started a podcast in the car, they could pick up where they left off on their preferred voice assistant.

For more information on the state of the podcasting marketplace, download our Podcasting STAT PACK.

Subscription box predictions

In 2020, consumers turned to online shopping to meet a wide range of needs including everything from groceries, household essentials and pet supplies to beauty products, snacks, and craft items. As boredom set in and Americans wanted a change of pace or a fun surprise, shoppers became subscribers, sampling from an array of categories.

With the pandemic continuing into the New Year, we expect to see more subscriptions in essential categories like beauty and hygiene products (e.g., make-up, toothbrushes, razors, grooming products), pet supplies (food, treats, toys, litter, flea meds) and subscribe & save options at major retailers (household goods). As we continue to work and study from home, shoppers will seek subscriptions and subscription boxes that soothe them, entertain them, educate them, and make their homes and work spaces more interesting and attractive. Meal kits, food, snack items and beverages will also be popular.  

Here is a sampling of subscription boxes that are likely to do well in 2021.

Adult beverages: Wine drinkers will enjoy the opportunity to sample different wines with subscription boxes like Winc, Vinebox and Haus. Spirits lovers have many choices including Saloon Box, Shaker and Spoon and American Cocktail Club. Beer drinkers have a multitude of options including the Craft Beer Club, the Rare Beer Club and Beer Drop.

Meal kits, food and snacks: The food category includes everything from prepared meals like Hello Fresh and Home Chef, meal kits like Dinnerly and Purple Carrot, and snacks and treats like the KIDS Munchie Box, My Keto Snack Box and Jerky of the Month Club.

Entertainment: Let’s face it. We are all tired of being at home, even introverts. For entertainment and amusement, shoppers will flock to subscription boxes like Book of the Month, mystery boxes like Hunt  A Killer and Murder Mystery in a Box, craft boxes like Knit-Wise and We Craft Box, and assorted boxes like Coffee and a Classic, Quirky-Crate and My Box of Magic.

Education: Kids may enjoy learning from home, but educational subscription boxes can supplement their schooling while also entertaining them. Kiwi and Tinker Crates, for examples, offer monthly STEAM projects for kids 5 to 8 and 9 to 16. Bitsbox subscribers, ages 6 to 12, get monthly coding projects, and KidArtLit brings together books and crafts to promote literacy and creativity.

Nesting: Raise your hand if you reimagined your home or workspace in 2020 to maximize your enjoyment and organization. Yep, me too. We expect to see more of that in 2021 with subscriptions like Bouqs which delivers custom, fresh flowers on demand, Art Crate which sends curated art each month to spruce up your home or home office, and Give Joy Crate which provides seasonal, boutique-worthy products to beautify and decorate your favorite space.

Publishing subscription predictions

Last year was a mixed bag for publishing. With the political climate and the pandemic, the demand for news was high, but revenue didn’t always follow suit. Digital subscriptions were up more than 50% for the year, but print subscription and advertising revenue were both down. And, of course, the publishing industry continues to struggle to right a ship which has been sinking for decades. Here are a few subscription predictions for the publishing industry in 2021:

• We expect to see continued contraction of the market as smaller media companies are swallowed by larger ones. The first in line will be Alden Global Capital with its eyes fixed on acquiring Tribune Publishing.
• In magazine publishing, we anticipate Meredith will continue to rightsize its organization by experimenting with different business models for its magazines and selling off magazines that are not profitable or that don’t fit its current business strategy. In some cases, like the recent sale of the Travel + Leisure brand, Meredith will retain operational and advertising control in exchange for a significant payout.
• Newspapers and magazines will continue to lay off staff, cut costs, and seek out operational synergies to make their futures more sustainable. Some will close up shop, while others will make major operational changes such as outsourcing certain functions. For example, in December, Gannett announced that it would outsource 485 back office jobs to India. In October, the Philadelphia Inquirer said it would sell its printing facility and lay off 500 employees. This type of activity will continue in 2021. For more on this, read Kristen Hare’s January 1, 2021 column, “What I’ve learned from covering a year of media layoffs and closures” for Poynter.org. It is an eye opener!
• Publishers will continue to get creative in how they reach their audiences. In 2020, publishers used text-based engagement to build subscriber relationships through tools like Subtext and The New Paper.
• More journalists and thought leaders will go solo, using tech tools like Substack to reach their followers directly, giving them control over their content and providing them with reliable recurring revenue.
• There is a possibility that the journalism industry could receive legislative support through the local journalism sustainability act. It has been supported by some legislators in an attempt to support local news organizations, especially during such a critical time. However, with so many other matters on their legislative agendas, this bill may not get enough support to keep it going.

Miscellaneous subscription predictions

The subscription economy is so broad that it would be impossible to include all our subscription predictions in one article. However, there are a few miscellaneous subscription predictions worthy of note. Smart subscription companies are focusing on the customer journey, ensuring a positive user experience and putting the customer before the product or service.

Payments will be another area to watch in 2021 as consumers demand more payment options, including the addition of ACH and more modern payment types like Apple Pay, Samsung Pay, Venmo, Afterpay, Klarna and others. This will make more work for subscription companies to set up, but by working with experienced payment vendors, the set-up process can be streamlined. The key is to eliminate any potential purchase barriers for subscribers.

In terms of industry regulations, we expect to see continued regulation of the subscription industry to ensure that best practices are followed and that companies act both legally and ethically. States will ferret out subscription companies whose terms and conditions are not clear and conspicuous, who make it difficult to cancel, and who automatically enroll shoppers without their express written consent.

And finally, we expect U.S. and international governments like the European Union to continue to investigate and call out tech companies like Apple, Amazon, Google and Facebook for potential antitrust and anticompetitive behavior. Each has some tie to the subscription industry, either directly or as a promotional or marketing tool. Potential fallout could have an impact on subscription companies.

What subscription trends do you expect to see in 2021? Share them with us at [email protected]!