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In their ongoing quest to build profitable and sustainable businesses around digital media, content owners are increasingly turning to subscription models. Although a sizeable portion of the target audience remains unwilling to pay for online or mobile content, many consumers are beginning to accept the idea that quality comes at a price.
Consumers’ expectations of multiscreen access are helping fuel growth in subscription models. From the end user’s perspective, the implied bargain is something along these lines: “If I'm going to pay a monthly fee to read the news or watch my favorite TV show, I expect to be able to access it on my laptop, tablet, smartphone, connected TV or any other device I choose.”
Universal access isn't always simple or possible, and content owners are still in a steep learning curve when it comes to monetizing their digital assets. However, the success of subscription models across a range of industries in recent months has caused many to rethink the conventional wisdom that people expect all digital content to be free.
Among purely subscription-based services, Netflix leads with its $7.99-per-month, all-you-can-stream plan, which in Q1 2013 had 29.17 million subscribers in the US, according to company information. Hulu Plus, whose plan is also $7.99 per month, is a distant second, with 4 million subscribers, according to an April blog post by the company.
It is difficult to pin down the total number of US digital video subscribers because of overlap among services, and because the lines between subscription-based viewing and ad-supported viewing are blurry for some services. However, The NPD Group last month estimated that 85% of US subscription video-on-demand users subscribed to Netflix—whether on its own or in conjunction with Amazon Prime or Hulu Plus. This suggests there were 34.3 million US streaming video subscribers in Q1 2013.
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