Music
We are all familiar with the subscription economy, and it certainly works as a reminder of the COVID-19 pandemic, when we were all hooked on our TVs watching Netflix or listening to our favorite music artist on Spotify.
Despite how modern it seems to be, the truth is that the subscription economy has been around for some time, surprisingly dating back to around 1800, with the first magazine subscriptions, or the subscriptions for fresh British milk, around 1860.
Over the years, the of subscription-based companies has turned the subscription model into an ideal business strategy since it provides unique benefits. In the same way, the adoption of this model across multiple industries has led to negative repercussions for the general public.
This article explores its growth across industries, benefits and disadvantages, and why this is important for you, as a service provider and/or as a customer.
Subscription economy for dummies: Importance and key drivers for growth
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The subscription economy is a recurring-revenue model in which products or services are delivered daily under a temporary or perpetual subscription in exchange for a fixed price, growing considerably in the last 20 years.
According to the last report in the Subscription Economy Market 2025 by Juniper, the global market had a total revenue of $722B in 2025, with a forecasted total revenue of $1.2T by 2030, with an average annual growth rate of more than 15%. Software as a service (SaaS) remains the biggest part of the subscription market with a revenue of more than $250B by 2022. The car rethinking industry, e-mobility application area, and the digitization of the health sector are expected to be enormously scaled by 2030.
The European market is expected to grow at a CAGR of 17.50% in the forecast period of 2026-2035. The main industry leaders within the region are beauty, food, and digital subscriptions. Whereas the countries where the subscription market stands out are the UK (beauty and personal care), Germany (software and consumer goods), France (food and beverage), and Italy and Spain (digital subscription and other categories).
A study made by Advances in Consumer Research (ACR) journal highlights how this model is great for businesses because it provides steady income, low upfront costs, and consistent lifetime value (the total value a customer provides to a company over their relationship), while promoting brand loyalty. It also offers unique advantages for consumers, such as a customer-centric approach focused on personalizing services, products and experiences, and experiences; convenient, time-saving solutions; cost-effectiveness; access to a diverse range of products rather than ownership of a few; and even social recognition and identity.
Gaming
The gaming industry had a steady increase after the COVID-19 pandemic, introducing subscription-based services, which have become regular within the industry. The business model is simple: gamers pay a subscription fee to access gaming services, and there are three different options for customers:
- A single video game, such as World of Warcraft, which gives access to all current expansions, all video game versions, and the retail and classic games.
- A game console’s online service, such as Ubisoft+ and PlayStation Plus, which offers access to all the video games made by a specific company.
- A subscription to a platform that offers games from different publishers, such as Microsoft Xbox Game Pass.
The global market for subscription-based gaming was estimated at $10.1B in 2023 and is forecasted to reach $21.3B by 2030, growing at a CAGR of 11.3% from 2023 to 2030.
It has been popularized due to its affordability and convenience, since the subscription to platforms enables players the flexibility to pay multiple games with an affordable fee.
The subscription model also offers unique advantages for companies, such as reduction of upfront costs since the games are directly streamed from servers, promoted by the technological development of high-speed internet infrastructure and 5G, cloud gaming service, cross-platform accounts, family plans, and leveraged AI to offer personalized game recommendations based on user behavior.
Healthcare and health tech
Another industry that is adapting to market and customer expectations is healthcare. As a response to technological and societal advancements, subscription medical care is increasing in popularity within the US, expected to reach $15.1bn by 2032.
Health tech represents a great opportunity for individuals and businesses since it introduces cost predictability, personalized attention, and wellness data. Healthcare providers and health tech companies are leveraging the use of AI, since it facilitates the data analysis process, helping health professionals to make more accurate and efficient diagnoses.
Within the health care and health tech industry, there are several subscription-based models, such as:
- Consumer apps: focused on wellness, fitness, chronic diseases, lifestyle, among others. These apps are a complement to health care, offering tailored services for each individual.
- Virtual Healthcare: offering doctor access, teletherapy, preventive care, and wellness exams. It can also assist in an emergency.
- Industry-focused: such as HealthTech Alpha, is a specialized data platform for digital health professionals and students. Offers access to research, networking, market analysis, and a tailored AI research assistant.
From education to parasocial relationships
The subscription economy has expanded to other services, such as education. Since the customer expectations and behavior is demanding accessible, personalized content at an affordable price, the global e-learning market is growing and expected to reach $1T by 2032 with subscription models leading.
The key drivers for growth are the increasing use of VR and AR in e-learning, digital transformation, and the partnership of universities and diversity in offerings. Some of the most used platforms worldwide are Duolingo, Coursera, and FutureLearn, among others.
Another industry that has greatly benefitted with the subscription model is the creator economy. Content creators are increasingly looking to subscription platforms such as Patreon, OnlyFans, and Substack, adopting them as a solution in a volatile economy and competitive markets, where creators heavily depended on paid partnerships and platform payouts, this way ensuring a stable monthly recurring revenue.
The key drivers for the growth of this market are, whatsoever, slightly different than the previously mentioned: audiences want to pay for a deeper relationship with the creator than passive scrolling, whether of its niche expertise or personal connection.
Challenges of the subscription economy
Despite all the unique benefits that the subscription model offers for customers and companies, the quick expansion and adoption of this model has led to negative effects in the audiences, which become challenges for the companies. You may be familiar with the concept of subscription fatigue, which reflects the customers’ reluctance to engage with multiple subscriptions.
This phenomenon was born due to the saturation in the expanding market and is driven by “lack of perceived value, hidden or unpredictable fees and loss of control,” fomenting churn (percentage of customers who cancel their subscription) for customers to save money or just because the service seems not useful for them.
Another challenge for companies is the constant pressure for ongoing investment in product development and customer engagement, especially in industries with minimal product differentiation, such as the streaming platforms industry. High production costs and limited audience engagement increase this model’s financial struggles, adding pressure on companies to deliver valuable services while generating profit.
Balancing profitability and user experience
Subscription models are no longer limited to entertainment platforms. They have become a core part of modern digital business strategies, offering predictable revenue streams for companies and enhancing customer experience.
The next phase will likely combine hybrid subscription models with usage-based pricing and data-driven personalization. To remain competitive, companies will need to adapt to consumer expectations by offering flexible prices and plans, pause options, bundling strategies, and partnerships across platforms.
Ultimately, the main challenge right now is how to design models that deliver long-term value without overwhelming users, balancing profitability with meaningful user experience.