As a teen, I remember ordering records from Columbia House and getting 12 albums for a penny. I thought surely I’d have one of the largest collections in the neighborhood in no time.  Little did I know I would soon be receiving albums from artists I’d never heard of, for a sizable fee, of course.  Since then, I like to think I’ve become a little savvier about what I sign up for.   In my defense, I’m not the only one who has had a subscription go wrong as evidenced by a cottage industry¹ that has sprung up to help people better manage subscriptions that have gotten a bit out of hand.

Subscription-based goods and services are nothing new, but they have taken on a new life in the COVID-19 economy.  Perhaps none is more obvious than subscription-based television.  During the pandemic I, like millions of others, have added more streaming subscriptions to keep my spirits up and give me something good to nap to. 

“But wait, there’s more!”  My husband gets his medications via mail order, and they are all on auto renew.  UPS and FedEx stop at my house almost daily to deliver a package from Amazon Prime.  I donate to several causes using a monthly subscription model – ChildFund, a volunteer radio station, and public television.  My latest foray into subscription land was to get pet food delivered on a regular schedule.  My dogs are on a special diet, and getting their dog food from the vet was the same cost as having it delivered to my door from an online store.  I did the math to determine how often and how much food I need to “set it and forget it” – weighing their dry food, determining how much wet food per can, per day, taking into consideration my husband feeds them less than I do, etc.  Once I saw how (relatively) simple that was, I moved on to ordering canned cat food from the same supplier.  My cats are picky, only eating a few specific flavors, and the online store had pre-packaged all their favorites for only four cents more a can.  The convenience factor easily outweighed the higher cost.

Another subscription type that is gaining traction, albeit slowly, is news.  The New York Times, for instance, set a record in 2020 with 2.3 million new digital-only subscriptions.²  In an annual survey of news leaders, diversifying revenue with a focus on subscriptions is top of mind for 76% of news executives³.  Digital-only subscriptions is a big change for local newspapers, and 41% of those surveyed agree it’s going to be tough.⁴  This May my local paper, the Hot Springs Sentinel Record, is discontinuing daily print versions during the week, going digital-only, printing only on Sundays.  We pick up a free iPad this week to use as long as we continue to subscribe.  

How do we improve selecting an audience for a subscription-based product? Subscription segmentation needs to consider product affinity and capacity in addition to the convenience factor of subscribing.  Using sweeping segmentation criteria such as only those likely to stream videos casts a wide net.  If we include that the individual has high-speed internet, is most likely paying for other streaming services, has young children at home, and has capacity thanks to income greater than $75,000 a year, the audience for an expensive streaming service for children’s videos becomes more in tune with the client’s persona and produces a better return on ad spend.  

Subscriptions have evolved since I was a kid and will continue to be around for the foreseeable future.  Find the box of the month that delights you and reach out to DataGuru to make your campaign focused on the things that matter.

¹ https://www.pcmag.com/how-to/how-to-track-and-manage-your-paid-subscriptions

² https://www.nytimes.com/2021/02/04/business/media/new-york-times-earnings.html

³https://www.twipemobile.com/year-subscriptions-other-learnings-reuters-latest-report/

⁴  Ibid