THE WORLD is changing from a consumption economy to a subscription economy estimated to reach US$530 billion (RM2.2 trillion) in value next year and more sectors taking advantage including automotive and the publishing.
Among media entity that has succeeded in the era of subscription economy is the UK newspaper, The Telegraph, that has 400,000 paying subscribers and 5 million registered users, after switching to a premium paywall and registered-access model two years ago, said the Digiday web.
Given positive reception of the consumers, Telegraph Media Group’s CEO, Nick Hugh, is optimistic about the publisher’s next goal of reaching 10 million registered users and 1 million paying digital and print subscribers by 2023.
"If you take 400,000 subscribers on £200 ARPU or average revenue per user, project that forward for 1 million subscribers, that defines sustainability," he said.
Elaborating further, he said, apart from the 5 million registrants, the paper also recorded 750,000 subscribers for the last 12 months.
"They paid for our journalism but are not registered, whether they buy the newspaper or access on a day pass, there are other mechanics in paying and these people are warm to the Telegraph."
The result? The Telegraph have an operating profit of £8.1 million (RM55.8 million) that allows the company to continue to hire journalists and keep investing in subscription capabilities and technology.
Based on data, the subscription economy is on the road to become a major trend, according to industry researcher, Gartner, and about 75 percent of companies selling direct to consumers will offer subscription services in 2023.
The Korea Times said, financial house, Credit Suisse estimated that the market size of the subscription economy by next year will reach US$530 billion.
That is more than double compared to 2000 when it was US$215 billion, evidence of the high growth of the subscription economy.
Another good example is Korean e-commerce firm, Coupang.
In a statement, it said that the number of people who subscribe to it's daily goods delivery service has reached more than 400,000 where consumers have a choice over 8,000 items from diapers and powdered milk to rice.
Joining the race is Hyundai Motor Group which has been test-operating three car subscription programs since January involving Hyundai, Kia Flex and Genesis Spectrum models.
Hyundai offer subscribers to drive its vehicles with a monthly fee of 720,000 won (US$615).
A Hyundai official was quoted as saying: "Though the number of subscribers is limited to around 100 in respective programs, we have seen the users are highly satisfied. Based on the popularity, we recently decided to extend the service period of the Genesis Spectrum program."
The subscription economy growth has changed the business landscape, forcing many sectors to introduce subscription services including music, videos, games and even private yachts.
Normally, a subscription service is about sending goods such as milk or vegetable to customers.
"But, consumer tastes have evolved to where customers subscribe to almost anything, which has led the creation of a so-called 'subscription economy' ," said the portal.
Companies and analysts are of the view that there's an increasing number of millennial - those born from 1980 and 2000 - who prefer to subscribe and this is going to be the mainstream.