- New YouGov study shows the widespread impact of the Subscription Economy® in the UK, with far-reaching implications for companies in virtually every industry
- Subscription business models have already transformed the media, entertainment and food and drink industries – more than a quarter of the UK population (27%) now subscribes to video streaming services such as Netflix, Amazon Prime or Sky Go
- UK consumers are now interested in how subscriptions could transform their lives in other areas, particularly internet of things-enabled future services
- Almost half (45%) of the population would like to subscribe to to home security services, while a quarter (25%) would like to subscribe to self-driving cars
London, UK – June 16th, 2016 – Zuora®, Inc., the world’s leading provider of subscription commerce, billing and finance solutions, today unveiled research which shows that 40 million Brits (78% of the adult population) are now subscribing to at least one product or service. The UK-wide study, conducted by YouGov, demonstrates the rising preference for UK consumers to pay a recurring fee for on-going access to services such as Netflix, Spotify or Graze, as opposed to buying products outright.
Now that UK consumers have become accustomed to the benefits of subscription services in industries such as entertainment, music and food, the YouGov study suggests significant demand for subscription-based access to internet of things-enabled future services. If commonly available as a subscription service in the future, almost half of Brits (45%) would be interested in subscribing to home security services, in addition to smart heating, cooling and lighting (41%); personal health care (41%); smart cities (37%); and self-driving cars (25%).
In 2016, the most popular digital subscription service in the UK is video streaming – over a quarter (27%) of consumers subscribe to the likes of Netflix, Amazon Prime or Sky Go. While digital subscription services are unsurprisingly popular today (10% of the UK population now subscribes to music streaming services and 15% to software and online storage), consumers have also recognised the benefits subscription services can bring to other aspects of their lives. In particular, subscriptions to media publications (17%), financial services (12%) and food and drink services (5%) tap into consumers’ desire to have increasingly flexible, personalised and ongoing relationships with brands.
Surprisingly, the huge uptake of subscription services in the UK is not being driven solely by young digital natives. Almost four out of five (78%) Brits aged 55+ subscribe to at least one product or service, compared to 76% of those aged 16-24. 15% of over 55s even say they couldn’t live without some of their subscription services. While a large proportion of these services are related to digital content – 15% subscribe to video and 4% to music streaming services – other subscriptions such as software and online storage (12%), fitness (9%) or food and drink (4%) are also popular amongst over 55s.
As the notion of paying regular fees for curated access to goods and services becomes mainstream across all age groups, Brits now spend on average 12% of their disposable income on subscription services.
The full results of the YouGov study are explored in full in a new Zuora® report released today, “A Nation Subscribed: 2016 State of the UK Subscription Economy”. The report provides insight for UK companies in all industries about how they can shift and transform business models in line with consumers’ preference for on-demand, personalised, and subscription-based access to services.
- Comments on the news:
“We are witnessing a once-in-a-century shift from a product era to the dawn of a global Subscription Economy. The way consumers like to consume goods and services has changed dramatically. Today, consumers are looking for personalised outcomes and experiences,” said Zuora CEO Tien Tzuo. “As consumers, we want immediate, convenient and flexible access to personalised services, which we only get through entering into ongoing, mutually beneficial relationships with brands. This has led to the rise of a new generation of businesses catering to this trend – the automatic and recurring delivery of razors before you run out, software updates for your connected car or countless albums or films at your fingertips whenever you want them. This transformation will ultimately affect every aspect of our personal and professional lives.” - “Ownership is a physical and psychological extension and expression of our identity,” said consumer psychologist Kate Nightingale. “If we didn’t own anything, we would feel like we don’t exist. Materialism has however risen to an unhealthy level, especially in the Western world. Consumers therefore started to look for fulfilment and identity expression via experiences and things they believe in rather than physical products. The growing need for individuality additionally generates a requirement for personalised and authentic experiences and services. Renting and subscription-based companies deliver consumers precisely that: personalised, authentic, fulfilling, and individual experiences.”
- “Buying and owning products isn’t that important to me,” said Leah B., 19, from Lincolnshire. “I just want the value in what they deliver, rather than the item itself. For example, once I’ve read a book I don’t keep it, I’ll pass it on to friends or donate it to charity. Otherwise it would just be gathering dust sitting on the shelf. Similarly, it’s much more convenient to just stream movies online than buying DVDs, as I get access to the same experience but without the physical product. It’s perfect for what I want! I’m also in the process of moving into my own place where there will be little space and storage options, so I need to be very smart about what products I keep and what I don’t.”
Additional Resources
Go to https://www.zuora.com/resource/nation-subscribed-uk for the full UK Subscription Index, including data on the popularity of specific subscription services available in the UK.
“The Subscription Economy: A Business Transformation” by Tien Tzuo, CEO of Zuora
SlideShare: “Drivers of Success in the Subscription Economy”
Follow us online:
Facebook.com/zuora
@Zuora
#SubscriptionEconomy
About Zuora, Inc.
Zuora’s Relationship Business Management (RBM) solution helps enable businesses in any industry to launch or shift products to subscription, implement new pay-as-you-go pricing and packaging models, gain new insights into subscriber behavior, open new revenue streams, and disrupt market segments to gain competitive advantage. Headquartered in Silicon Valley, Zuora also operates offices in Atlanta, Boston, San Francisco, London, Paris, Munich, Beijing, Sydney, Tokyo, Amsterdam, Denver and New York. Zuora clients come from a wide range of industries, including media, travel services, consumer packaged goods, cloud services, and telecommunications. Clients include Financial Times, Schneider Electric, Box, Honeywell, NCR, RTL, lynda.com, The Guardian, YP.com, BlueJeans, Shutterfly, TripAdvisor, Vivint and Trulia.
About YouGov
YouGov is an international market research firm, headquartered in the UK. With over 3.3 million people participating in their panels to produce the largest daily updated record of people’s habits and opinions in existence, it is the most quoted source in the UK. It was founded in 2000, and now employs 591 people worldwide.
About the research
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,115 adults. Fieldwork was undertaken between 27/04/16 – 04/05/16. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 16+).
Media Contact:
Marc Rettig
zuora@nelsonbostockunlimited.com
020 7792 7423
© 2016 Zuora, Inc. All Rights Reserved. Zuora, Relationship Business Management (RBM), and Subscription Economy are trademarks of Zuora, Inc. Third party trademarks mentioned above are owned by their respective companies. Nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third parties of Zuora or any aspect of this press release. To learn more about Zuora, please visit zuorainternprd.wpengine.com.