We’ve all heard about the transition to subscription models and the rapid increase in online subscription service providers. But how big is the subscription market, really?
It’s fairly easy to find data on the B2C online sales market in Europe and worldwide, including growth rates and breakdown by type of purchase. On the other hand, it is hard to find data for the subscription market. However, it is generally agreed that subscription models are the future of commerce, that they encourage customer loyalty, and that they offer merchants greater stability.
“Revenue streams from a subscription model are more predictable than a perpetual model, which is a feature that investors love,” according to Gartner.
So how big is the online subscription market? We’ve attempted to gauge the size of this market using all the information we have about the European e-commerce market. We estimate that it is a market worth €62 billion, or 22% of the total e-commerce market. To this should be added about €1.4 billion in donations to charitable organizations made by subscription. These figures are an estimate, and we welcome any comments our readers might have on the matter.
| European B2C online market 2012 (EU 28) | Online revenues estimated (€bn) | Subscrip. model penetration (%) | Online subscrip. revenues (€bn) | |
| Telecom | mobile, Internet access | 35.5 | 80% | 28.4 |
| Media content | press, books, music, film subscriptions | 20.0 | 50% | 10.0 |
| Utilities | water, gas, electricity | 12.0 | 80% | 9.6 |
| Computer services | server rental, hosting, storage, IT securiy | 7.4 | 80% | 5.9 |
| Insurance | life and other premiums | 19.9 | 20% | 4.0 |
| Travel | public transport & toll roads | 7.4 | 40% | 3.0 |
| Gaming | digital games | 4.0 | 10% | 0.4 |
| Electronics | consumer electronics | 42.9 | 0,5% | 0.2 |
| Travel | hotel and air travel | 78.6 | ||
| Fashion | clothing | 21.8 | ||
| Household appliances | B2C | 10.9 | ||
| Other | FMCG, home services | 16.7 | 2% | 0.3 |
| Total | 277.0 | 22% | 61.8 | |
| Charitable orgs. | 6.8 | 20% | 1.4 | |
SlimPay estimates – March 2014
It appears that the growth of the online subscription market is at least equal to that of the e-commerce market. We would like to fine tune our estimates, but that is an even bigger challenge. We’d appreciate your help!
Gartner, New Subscription Delivery Model, Gene Phifer, Tom Austin, John Rizzuto, July 2013
