The subscription economy has significantly transformed recently, especially in the media and entertainment sectors. Indirect channels like banking apps and telcos are increasingly replacing traditional direct-to-consumer (DTC) models. In 2023, only 37% of subscription video-on-demand (SVOD) subscribers went directly through service providers, with the remaining 63% acquired via indirect channels, according to Minna Technologies’ report, Subscription Economy: Evolution Not Revolution. This shift emphasizes the growing importance of platforms that offer seamless subscription management for consumers.
As consumer demand shifts toward more centralized and convenient management, indirect channels are crucial in delivering a frictionless experience. The rise of banking apps and telcos as key subscription facilitators allows businesses to engage customers more effectively through trusted platforms. According to Minna’s data, 64% of subscribers trust their banking apps more than subscription platforms or app stores, particularly regarding data security. This highlights consumer demand for more innovative features, consolidated subscription management, and greater personalization within banking apps.
The Consumer Demand for Consolidation
Minna Technologies, a leader in subscription management integrated into banking and fintech apps, is addressing consumers’ growing demand for efficient subscription solutions. Collaborating with banks, fintechs, and subscription businesses, Minna supports revenue growth, reduces operational costs, and enhances engagement for over 120 million users. Their recent report, produced with FT Strategies and Savanta, highlights the increasing need for consolidated subscription management solutions.
Consumers today manage a growing number of subscriptions, with the average U.S. consumer holding 8.2 subscriptions and paying $118 monthly, totaling approximately $1,416 annually. This high level of spending has led to a growing demand for more efficient, consolidated subscription management solutions. In fact, 73% of U.S. consumers have expressed interest in using a single platform to manage all their subscriptions.
Banking apps have emerged as a key platform for subscription management, as 61% of consumers believe that managing their subscriptions through their banking app is essential. This reflects a broader trend where consumers trust their financial institutions to offer streamlined, consolidated subscription management solutions rather than using individual service providers. Additionally, 61% of consumers use a single card for all their subscriptions, further reinforcing the desire for simplicity and efficiency in managing recurring payments.
How Banks and Telcos Are Capitalizing on This Opportunity
Banks and telcos increasingly integrate subscription management solutions into their platforms to enhance customer experience and engagement. Banks like ING and the Bank of Scotland have implemented these systems, allowing users to manage their subscriptions directly from their banking apps. Visa and Mastercard have also joined the subscription management space, offering solutions that enable customers to monitor and control their subscriptions, improving flexibility and satisfaction across financial services. With 45% of consumers aged 18-44 indicating they would switch banks for better subscription management features, financial institutions and fintechs are leveraging this trend to enhance customer engagement and retention. Offering platforms where users can consolidate and manage their subscriptions has proven effective, as 60% of subscription users log into their banking apps daily compared to 39% of non-subscription users.
Use Cases: Leveraging Indirect Channels for Subscriptions
Telco Bundling Strategies
Telcos capitalize on this shift by bundling subscription services with their mobile and internet plans. For instance, Verizon’s +Play and Optus SubHub allow customers to manage multiple subscriptions from a single hub, such as Netflix and Disney+. This bundling strategy attracts customers and fosters loyalty through added convenience and discounts.
Bango’s Partnerships with Uber and Disney
Telcos are capitalizing on the shift toward indirect subscription channels by bundling services with their mobile and internet plans. Platforms like Verizon’s +Play and Optus SubHub allow customers to manage multiple subscriptions from a single hub, such as Netflix and Disney+. This strategy attracts more customers by offering convenience and discounts, fostering loyalty.
According to Bango’s 2024 consumer survey, the subscription economy is evolving rapidly, with the average consumer managing 4.5 subscriptions and 10% holding over 10. This surge has increased demand for flexible, bundled options to help manage costs. The survey also highlights that 76% of subscribers have at least one video streaming service, with average annual spending on subscriptions at $924 and some exceeding $2,000. Additionally, 20% of subscribers now rely exclusively on indirect channels like bundles and third-party sales, underscoring the growing preference for convenient, cost-effective solutions.
Bango has formed strategic partnerships to extend its reach further in the subscription market. For example, Bango partnered with Uber to integrate Uber One into mobile phone and broadband plans via Bango’s Digital Vending Machine (DVM™). This allows telecom operators and resellers to include Uber One in their subscription bundles, offering customers benefits like discounted rides and deliveries.
Similarly, Bango partnered with Disney to boost the availability of Disney+ by enabling telecom operators to bundle the streaming service with their consumer offers. With 153.8 million Disney+ subscribers globally, this partnership opens new markets by offering Disney+ through bundled packages, leveraging indirect channels to drive further subscriber growth.
Mastercard’s Smart Subscriptions Solution
Mastercard has also entered the subscription space with its Smart Subscriptions solution. This tool lets consumers quickly cancel, pause, and resume subscriptions while providing insights into their spending habits. Using open banking technology through Finicity, Mastercard connects multiple accounts into a centralized hub. Financial institutions can integrate this solution with a single API, enhancing customer engagement. Currently piloted in the U.S., Mastercard’s Smart Subscriptions is expected to expand into additional markets.
These partnerships highlight how banks, telcos, and financial institutions are strategically positioning themselves to leverage indirect channels. This approach offers consumers greater convenience, flexibility, and value while businesses benefit from enhanced retention and engagement.
Benefits for Subscription Businesses
Subscription businesses, particularly in media, can significantly reduce churn and increase customer retention by leveraging indirect channels like banking apps and telcos. 67% of companies have seen up to 20% of their customers churning and returning in the last six months, highlighting the urgent need for optimized subscription management solutions. Integrating their services with trusted platforms allows businesses to reach customers through familiar, user-friendly environments, reducing subscription management friction.
Reduction in Churn and Increased Retention
Indirect channels allow businesses to tap into customer bases that already trust their financial institutions or telco service providers. This trust enhances user engagement and reduces the likelihood of cancellations, as consumers prefer managing subscriptions through platforms they use regularly. Offering subscription management through these indirect channels helps businesses increase retention and provide a more seamless, centralized user experience.
Enhanced Consumer Control and Satisfaction
Consumers value flexibility and control over their subscriptions, which is why integrating subscription management into banking apps and telco platforms offers a frictionless experience. These platforms enable users to pause, upgrade, or cancel subscriptions with minimal hassle, resulting in higher satisfaction and lower churn rates. Businesses also gain valuable insights into consumer behavior through these channels, which helps refine their offerings and personalize services based on user preferences.
By providing an efficient subscription management experience, businesses retain their customers and reduce operational costs related to customer service inquiries about subscription changes or cancellations.
Unlocking Future Opportunities through Indirect Channels
The rise of indirect channels, such as banking apps and telcos, fundamentally reshapes the subscription economy. These platforms offer consumers the convenience of centralized subscription management, simplifying the process of handling multiple services. Their growing role highlights the increasing importance of trusted platforms in driving customer engagement and retention.
Integrating with these platforms presents a valuable opportunity for businesses to reduce churn and enhance customer loyalty. Banks and telcos, in particular, are in a prime position to capitalize on this trend, offering consumers greater control and flexibility in managing their subscriptions, which leads to improved satisfaction and deeper engagement.
As the subscription economy evolves, businesses embracing these indirect channels will streamline their operations and gain critical insights into consumer behavior. This will allow them to offer more personalized experiences, paving the way for future growth and innovation across industries.
You can download the full Minna Technologies report, Subscription Economy: Evolution Not Revolution, here.
