Rejoice! The latest Subscription Economy Index is here. This is an unofficial holiday for the Subscribed Institute and its amazing data science team.
For those of you new to the study (which you can download here), the SEI report is based on anonymized, aggregated, system-generated activity of hundreds of subscription companies across several key verticals: SaaS, Media, Manufacturing, Internet of Things (IoT), Business Services, and Communications/Video Conferencing.
This edition of the SEI (as of February 2022) features new data from the 12 months ending December 31, 2021, and provides the best available snapshot of the Subscription Economy as a whole.
So what’s my biggest takeaway? Well, I think this study might surprise some people. It answers a key question that’s been floating around in the news lately.
We all know that a variety of subscription businesses, including the well-known “Stay At Home Stocks,” thrived during the pandemic. But now the backlash has arrived.
A recent Fortune article called “Was the Pandemic Bad for Peloton and Netflix?” sums up the basic thinking: Sure, plenty of subscription companies went into hyperdrive during the pandemic, but that growth was simply unsustainable. The crash was inevitable.
But here’s the surprising fact that our new study shows: Subscription companies are keeping most of the gains they made during shelter-in-place.
The fact is that churn significantly dropped in 2021 for SEI companies, with a 14% improvement. Subscription companies are clearly becoming much smarter about keeping their customers happy.
As you’ll see in the first graph below, we may be returning to normal (or at least the new normal), but we’re also hanging onto our subscriptions.
Here are five key charts from the latest SEI: