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There’s a subscription for that!

The growth of subscription services has exploded. Several papers [1, 2] reported households spending more than £550 per year on subscription services during 2020.

In recent years, the increase in subscriptions per household has been fuelled by the disaggregation of media content. Instead of paying one bill to Sky or Virgin, consumers are now more likely to have several TV subscriptions; Netflix, Amazon Prime, Disney+, the list goes on.

However, the number of products and services using this model spans far beyond television. They range from the more common; music, movies, games, the gym, to the slightly more unusual; food, plants, home security, beauty, clothes, IT security… the list of things you can get on subscription is endless.

The benefit to the merchant is obvious – they receive a more consistent, recurring revenue stream and a more loyal customer base. However, for providers of subscription services, what’s better than loyalty for just your own product? Adding other products consumers love by bundling subscriptions together. For example, while I might remain loyal to BT because they offer me a great deal on my internet, if I can find a cheaper deal with similar quality internet, I would consider switching. However, if I’ve also got my Xbox Game Pass and Amazon Prime subscription through BT, the price differential needs to be significant for me to go through the hassle of switching, transferring across those other services, losing any special terms I might have etc.

The wide-ranging options for bundling is great news for Bango. Not only do we power any variety of subscription bundles, but by using the knowledge we have from processing billions of dollars’ worth of payments, we can recommend the best bundles to offer, which increases customer conversion and retention.

A great example is a deal we announced this week with Microsoft and a leading UK telco to bundle M365 subscriptions with the telco bill. Productivity services aren’t necessarily what comes to mind when you think about subscription bundling but this is a great indicator of the sector expansion to come in this business for Bango.


[1] Households spend £552 a year on subscription services | This is Money


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