A year ago, we asked a big question: Is the Subscription Economy over?
Consumers were overwhelmed — too many streaming services. Companies were bloated — too many SaaS applications (sometimes more than there were employees). And too little flexibility. A new phrase, “Subscriber fatigue”, had entered our lexicon, and some businesses saw churn rates rise as customers cut back on unnecessary or rigid subscriptions.
But rather than marking the end of the Subscription Economy, this reckoning forced the industry to adapt. Instead of retreating, businesses responded with new ideas. They introduced flexible pricing models, mixed monetization strategies, and more personalized experiences.
Now, a year later, what have we learned?
A changing market, not a dying one
If subscriptions were truly in decline, we wouldn’t be seeing a continued surge in new subscription offerings. Yet, companies across industries are still launching new models, including for sports betting, smartphones, and even sleep insights for babies.
Consumers are also telling a different story. According to a forthcoming survey we conducted with The Harris Poll, 68% of consumers subscribed to something for the first time just last year. So the demand for subscriptions isn’t vanishing — it’s evolving. We’ll be back this spring with more insights from consumers!
The new subscription playbook: Flexibility & value
The past year also showed us that consumers don’t necessarily want fewer subscriptions — they want better ones. What changed? We found three big things:
First — and foremost — they want more control. Features like canceling without hassle, and pausing and adjusting plans have become essential.
Second, they want more personalized experiences. This is where AI is making a big difference. Companies are using it to tailor offerings based on user behavior.
And third, they love hybrid business models. Businesses are combining subscriptions with freemium, usage-based, and prepaid options.
These shifts highlight a larger trend: subscriptions must be dynamic and customer-centric, not rigid and transactional.
A new mandate: Your monetization strategy must evolve
All of these case studies reveal that subscription businesses are not in decline; they’re evolving. The most successful companies are moving beyond rigid, one-size-fits-all models toward a strategy that blends subscriptions, usage-based pricing, premium add-ons, freemium, and other business models into a seamless revenue engine.
From the Starbucks Card model that builds loyalty through prepayment to the power of free access to a product in driving recurring growth, companies are proving that flexibility is the new normal — and the future. The businesses that grow will be those that embrace dynamic, adaptive monetization systems that quickly meet customers where they are.
Speaking of AI …
If there’s one thing we still don’t have a clear answer on, it’s AI. It’s reshaping pricing, engagement, and customer interactions, but there’s no universal playbook. Some companies are getting it right. Adobe took a value-driven approach, launching an AI video generation tool in beta without forcing an immediate upsell, ensuring customers saw the impact before assigning a price tag.
Zendesk approached it differently with outcome-based pricing. Instead of charging for AI itself, they tied pricing to resolved tickets—businesses only paid when AI handled customer requests without human help. The value was clear: fewer support tickets, lower costs, and faster response times. No guesswork. Just AI that earns its keep.
Then there’s Microsoft, which took the opposite approach. With Copilot, they put AI behind a paywall from Day 1, charging $20/month before proving its value. Instead of tying pricing to results or confirming its value among customers (they rejected it), they forced AI into Microsoft 365 and raised subscription costs.
We can’t predict exactly how AI pricing will evolve, but one thing is clear: businesses must communicate AI’s value and deliver on it. Customers won’t pay extra for AI just because it’s there. It has to be essential.
The next challenge: Adapting billing to keep up
The way companies monetize is evolving, but billing systems aren’t keeping pace. Businesses need billing agility to match consumer demands for flexible payment structures, hybrid monetization models, and evolving AI-driven strategies.
We’ve already explored why Finance — not Engineering — should own billing, but the conversation doesn’t stop there. We’ll continue to unpack why billing infrastructure needs to evolve and how companies can ensure they have the right systems in place to support the next phase of the Subscription Economy.
