Recurly: subscription business moving to retention as growth slows

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The global digital media and entertainment industry has experienced a 124% increase in subscribers since 2020, and the digital publishing industry saw a 536% increase in subscribers over the same time period, according to data released by subscription management and billing platform Recurly.

However, with an increasingly saturated market, the industry is now moving towards retention strategies rather than acquisition for its own stake, according to Recurly’s data. The median acquisition rate for digital media and entertainment subscriptions declined from 2020 as growth stabilized, with digital media and entertainment’s median acquisition rate standing at 5.8%. However, the overall number of subscribers continued to grow.

The data found that digital media and entertainment subscriptions saw a median churn rate of 6.9%, more than 50% higher than the industry median. However, digital publishing’s lower churn rate of 3.9% is likely due to less competition and higher brand loyalty, Recurly said.

The data indicated that the optimal subscription trial period is eight to 21 days long, with the overall trial-to-paid conversion rate for digital media and entertainment at 52.6% and digital publishing at 50%. However, trial subscriptions are churning higher than previously was the case.

Recurly’s research also found that alternative payment methods are becoming more, with 79.3% of these transactions in 2023 completed via PayPal and Apple Pay usage doubling in a year to reach 15.9%.

Debit cards surpassed credit cards in popularity, representing 71.8% of digital media and entertainment transactions and 65.8% of digital publishing transactions, compared to the 68.6% industry median.

“We’re witnessing an era of intense innovation in the digital media and entertainment subscription industry, with momentum only continuing to accelerate. Whether it’s watching the latest show, reading a book or catching up on the news, consumers are hungry for tailored experiences and flexible options that cater to their unique tastes. This shift is driving the industry to rethink traditional models, leaning heavily into data-driven customization and user engagement strategies to meet the ever-evolving demands of a digital-first audience,” said Joe Rohrlich, CEO of Recurly.