The streaming model revolutionised how we consume content, and its impact extends beyond the screens. Starting with music and video, it has transformed into a new consumption pattern, now encompassing various sectors of the economy. Books, fashion, food, healthcare, and even pet services are now delivered on a recurring, subscription basis. According to McKinsey, this market grew by over 100% annually between 2011 and 2016 in the United States. In Brazil, a PwC survey indicates that predictable revenue and continued customer engagement are the key attractions of this model for businesses.
Faced with rising costs of acquiring new customers, the subscription model has moved from a novelty to a market requirement. More than just a trend, subscription-based consumption represents a practical and strategic response to the contemporary challenges faced by businesses. Companies embracing recurring revenue secure three fundamental pillars for their sustainability: predictable revenue, customer loyalty, and scalability potential.
This is a model that allows for more secure future planning, reduced customer churn, and scaling operations with more aggressive investments in marketing, technology, and innovation. Unsurprisingly, giants like Microsoft, Apple, and Amazon already concentrate a significant portion of their revenue in this format. Nevertheless, many traditional businesses resist this transformation, putting them at a competitive disadvantage. The problem isn't just ignoring a trend, but closing one's eyes to a structural shift in consumer behaviour.
Today's consumers value convenience, personalization, and seamless experiences, expecting brands to deliver them effortlessly. Ignoring this trend is a strategic risk. To remain relevant, businesses need to move beyond the transactional model, focused on individual purchases, and embrace a relational approach, underpinned by ecosystems of recurring products and services. The key lies in customer-centric digital transformation: investing in data, support, and personalisation. Subscription-based consumption isn't a passing fad; it's the new standard. And brands that don't adapt now run a serious risk of falling behind.
The risk of being left behind: why subscription consumption is inevitable
