Subscription Audiences Vary Across Subscription Niches

Subscription Services Appeal To A Variety Of Consumers

The rise of subscription services is the commerce and retail story of the last decade. The alignment of subscriptions with the growth of digital, streaming services and influencer-inspired shopping habits has magnified the profile of subscription options. Across many platforms and revenue streams, subscriptions are being positioned as a simple, efficient way to meet an existing need, pay a bill or nurture a hobby, and different audiences are responding to the various subscription opportunities.

Streaming Platforms Are Exploding In Popularity With U.S. Consumers Spending More Than $2 Billion A Month On Streaming Subscriptions

In 2018, there were 495 original scripted shows released, which is more than double what was created in 2009. Of the 495 shows, 33% were produced by online platforms of some kind. Streaming changed television forever. And it’s changed the way consumers engage with television. Subscriptions are commonplace in the streaming world, and different platforms attract distinct consumer bases.

Netflix

Netflix, the OG of streaming services, has more than 139 million subscribers worldwide.

• 58 million Netflix subscribers are based in the U.S.
• 58% of subscribers choose Netflix because they believe it is cost effective.
• In 2017, 89% of Millennials and 78% of Gen X used Netflix for most of their TV-watching — this included a mix of original programming and network shows Netflix owned the rights to.
• Netflix users are less rural and more well-off than the average consumer.

Hulu

Hulu, an up-and-coming streaming service, offers access to network shows subscribers may have missed or prefer to watch on their own schedules. Recently, the streaming service experienced a period of strong growth with the introduction of original programming like The Handmaid’s Tale. Hulu reached 17 million subscribers in 2017, the year they launched their original programming.

• Hulu currently has 25 million subscribers. A 48% subscriber increase since 2017.
• Hulu only serves the U.S.
• The median age of Hulu subscribers is 32.
• Hulu subscribers are more likely to be single than other streaming service subscribers.
• Hulu users are the most prone to have hopped around various streaming services.
• In 2017, 32 million unique viewers chose the cheaper Hulu subscription that includes ads. (One Hulu membership can yield multiple unique viewers per household.)
• The average income of Hulu subscribers in 2018 was $93,000.

YouTube

Even with powerhouse Netflix in the game, YouTube remains by far the most dominant streaming service.

• As of 2018, the Google-owned video platform attracted more than 1.8 billion users globally every month (and that’s just those who’ve logged in).
• 1 billion hours of content are consumed daily.
• 90% of YouTube’s content categories are watched mainly by men.
• One-third of Baby Boomers watch YouTube videos to learn about products and services; 68% of Baby Boomers watch for entertainment.
• YouTube’s subscription model, however, continues to evolve with a recent decision to lean back into advertising and celebrity connections instead of promoting subscriptions.

Amazon Prime Offers A Variety Of Options For Its Subscribers

Amazon is a unique subscription model because its Prime service initially existed solely as a subscription offering free shipping and other perks for the retail side of Amazon. It evolved to include streaming of original and licensed programming, and in 2016 spun Amazon Prime Video into its subscription business.

• In 2018, Jeff Bezos announced that Amazon Prime had more than 100 million members. This was 62% of their users.
• In 2017, 39% of Prime Members were 18-34 years old.
• 82% of households with incomes of $112,000 or more held Prime memberships in 2017. However, usership is spread across incomes. For example, 52% of Prime memberships are held by households with incomes of $21-$41K.
• By 2022, it is predicted Amazon Prime Video subscribers will exceed 122 million globally.
• Amazon Prime Video subscribers skew older and have more education and interest in politics than their streaming subscriber counterparts.

Curated Subscription Boxes Reach Niche Audiences

The curated subscription box business is dominated by food, beauty and kids. In a report by Hitwise, covering April 2017 to April 2018, the 10 most-visited subscription box sites, which encompass the food, beauty and kid categories, accounted for 61% of online visits in the subscription industry.

• As of 2018:
  • 65% of traffic on curated subscription box websites came from mobile devices.
  • Women were 55% more likely to buy subscription boxes, and Millennials were 16% more likely, than the average consumer.
  • 42% of male subscribers had three or more subscriptions.
  • Subscription box subscribers were often college educated or students, who lived in “hipster” towns, like Austin and Portland, and enjoyed the arts.
  • Curated subscription box shoppers were twice as likely to buy on Amazon and three times more likely than the average shopper to buy from Etsy, indicating a comfort with online shopping and curated items.
  • 28% of “curate and access” subscribers, this includes subscribers to boxes like Birchbox and JustFab, cited personalization as a primary incentive for renewal.

Meal Kits Are Still Popular With Certain Target Audiences

The acquisition of meal kit subscription company Plated by Albertsons and the move by Hello Fresh to sell a supermarket version of their previously subscription-only meal kits are decent illustrations of the ways the once booming meal kit subscription industry has evolved. And there is a still a strong market for meal prep boxes.

• As of 2017:
  • 29% of Millennials and 26% of Gen Xers tried meal kits. In the same year, 23% of men and 15% of women say they tried meal kits.
  • Of those who gave meal kits a try, 1 in 4 were urban dwellers. Only 14% were rural.
  • Top meal kit subscribers tended to earn over $100,000.
  • Families with children were 326% more likely to try meal kits than those without children.
• 12% of consumers purchased meal kits in the latter half of 2018, and 23% were interested in trying one.
• In the last year, 60% of meal kit growth was in the retail space, alerting marketers that subscription is only one mode of delivery for this audience.

Car Subscriptions May Appeal To Younger Drivers Less Interested In Ownership

The romantic notion of a shiny new car banking curves on the open road is a much less appealing and effective marketing message for younger drivers than it used to be. According to a study by Arity, a Chicago transportation technology and data company, “More than half of adults between the ages of 22 and 37 say a car is not worth the money spent on maintenance, and that they would rather be doing something other than driving.”

This demographic of less-interested drivers is leading automotive companies to offer subscription services for their vehicles, or partner with companies that do, like Canvas and Fair. Car sharing services also remain popular options for urban-dwellers that aren’t interested in car ownership.

• 16% of Millennials say they could live without regular access to cars.
• Millennials are more likely to share cars or only use one on the weekend.
• Zipcar, a car sharing platform, serviced more than 317,000 U.S. customers in 2018 with their combination of yearly, monthly and à la carte subscription plans.
• The forecast for car sharing globally estimates a reach of 36 million consumers by 2025.

Nonprofits Have Successfully Positioned Their Sustaining Donor Programs As Subscriptions

Nonprofits have successfully employed sustained donor programs with automatic monthly or annual renewals. This recurring donation model can be an effective way to generate more money from more donors over time. And with the growth of the subscription market, a sustained donor program can be positioned as another turnkey way to easily meet a need. In this case, for charity.

• As of 2017:
  • 40% of Millennial donors and 49% of Generation X and Baby Boomer donors were enrolled in monthly giving programs.
  • Millennials responded to cause requests on social media and texts, as did Gen Xers.
  • 19% of Gen X-aged donors have placed donations though fundraising facilitated by Facebook. Email was also an effective fundraising tool with Xers.
  • Baby Boomers were most likely to make recurring donations, and were also most likely to be adaptable to all forms of solicitation from social to direct mail.
• In 2018, mobile usage accounted for 48% of all traffic to nonprofit websites.
• Monthly giving was 16% of all online nonprofit revenue in 2018.

Understanding Who The Audience Is For Different Subscription Services

To effectively market a service to the right audience, brands need to be aware of who their audiences are, how they shop and what makes them tick. The mindset of different generations of shoppers can be a factor in when and where shoppers choose a subscription option, as can geography and income. Although there is a lot of overlap among subscription shoppers, understanding the nuances of their buying habits may lead to increased revenue and retention.

Reimagining Your Subscription Marketing Win?

Contact Digital Media Solutions today.

*Unless otherwise indicated all statistics are for 2019.

About the Author

Sarah Cavill is a Marketing Communications Writer at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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