Recurly recently published the report The 2023 State of Subscriptions, which I highly recommend. They have been publishing such reports for a long time, and from my perspective, this is the best industry document that provides insight into what has happened in the subscription business over the past year.
I recommend reading the full report to see the complete picture, but below is a brief TLDR.
Acquisition:
- Free trials remain an interesting acquisition channel, as they can show conversion rates from 34.3% (retail) to 43.3% (media & entertainment).
- Shorter trials show better conversion rates: 42.8% for 7-day trials versus 33.3% for 61+ days.
- Since 2018, the use of coupons has increased by 261.5%.
- Only a few services offer gift subscriptions, while nearly 70% of consumers want to give and receive gift subscriptions.
Payments:
- Main payment methods: 52.9% - debit, 26.7% - credit, 18.8% - PayPal, and 1.6% - others.
- Debit cards have the highest rates of failed payments - 9.2% for initial and 13.0% for recurring transactions compared to alternative payment methods (APM) - 4.8% and 6.9% respectively.
- In the education sector, the highest decline rate is 8.7%, while in software and retail, it is the lowest at 70%.
- In the media & entertainment sector, APM account for 23% of all transactions.
- The overall churn rate for debit cards is the highest at 9.7%, followed by APM at 7.7% and credit cards at 5.9%.
- In terms of fraud, APM outperform both credit and debit cards.
Subscription Growth:
- Since 2018, Recurly vendors have seen a 21% increase in subscribers from 2021 to 2022.
- Europe shows better results with a 20.1% increase in active subscribers.
- In 2022, Recurly vendors generated an additional $480 million in revenue from add-ons.