Money & Business

Could More Recurring Fees Create Subscription Fatigue?

By / Jul 23, 2018 (eatcute/iStock/Getty Images Plus)

Two recent reports suggest that subscription services lead to unconscious overspending by consumers and more selectivity about what they’re willing to pay for. Could subscription fatigue create problems for membership programs?

As more and more content offerings and consumer products reach customers via subscriptions—everything from Netflix and Spotify to Birchbox and Dollar Shave Club—the marketplace is getting so crowded that a new problem could be on the horizon: Consumers, worried about their budgets, could become more careful about what they’re willing to pay for on a recurring basis.

And that could pose a challenge for membership programs.

A new report from Fetch [registration] reveals that most “mobile-first consumers” it surveyed subscribe to between two and five paid subscription services. Of the sectors it included, the survey found that video, music, and computer software are the most prevalent options—with video leading the pack (71 percent of respondents said they currently subscribe to a video service).

Other sectors are seeing growing interest in subscriptions, according to the report. More than a quarter of respondents said they have considered grocery, fashion/grooming, and gaming subscription services.

(One surprise: While people who use news services are fairly active, with 40 percent of those users checking them daily, they represent a niche audience compared to other categories. While around 21 percent of consumers are researching the idea of subscribing to news services, a full 62 percent of respondents say they’re not considering subscribing to a news service at all.)

Getting Choosy

The study found evidence that all that growth in paid subscription services could be creating subscription fatigue. More than three-quarters of respondents (77 percent) said the large number of services available makes it hard to decide what to subscribe to. Additionally, the increase in options is leading some consumers to be more thoughtful about what they’re willing to spend—more than two-thirds (69 percent) have expressed interest in bundles as a way to save money. And subscribers are even willing to have the costs of subscriptions subsidized.

“When the costs of subscribing to multiple paid services start adding up, mobile-first consumers are looking for cost-saving measures which include greater tolerance for some advertising vs. an ad-free experience,” the report states.

Overspending Without Realizing It

Another piece of recent research on the issue, from Waterstone Group, suggests that many consumers are struggling to keep track of what they’re spending on subscriptions. Eighty-four percent underestimated what they spend on subscriptions each month—many by $100 or more.

“Clearly, most Americans are unaware of how much they spend on subscription services,” Waterstone states. “When pressed for a quick answer, they dramatically underestimate the amount. This is a boon for companies operating subscription models … and a bust for advocates of conscientious budgeting!”

Association members pay for more than products and content when they pay their annual dues—community, professional development, and advocacy on public policy issues are the less tangible “deliverables” that associations provide. But this research suggests that, if associations are to avoid becoming casualties of subscription fatigue at a time when for-profit companies are increasingly borrowing from their membership strategies, their ability to clearly prove their value will become more important than ever.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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