Recurly has released its 2025 State of Subscriptions report, shedding light on a crucial turning point for subscription businesses: retention is now the primary driver of growth. As acquisition rates continue to decline—falling to 2.8% in 2024 from 4.1% in 2021—the subscription model is maturing, and companies must rethink how they engage with their existing customers.
This shift is particularly relevant for streaming services, where the challenge isn’t just attracting new subscribers but keeping them loyal and engaged in a crowded marketplace. The data underscores that the future of subscriptions is rooted in retention-first strategies that go beyond content libraries to deliver meaningful, habitual experiences.
The Retention Imperative
Retention is no longer a supplementary focus; it’s a vital metric for subscription success. Yet, many organizations struggle to prioritize it effectively. Fragmented strategies often result from siloed business units with competing KPIs, which hinder holistic efforts to foster subscriber loyalty. The challenge for streaming services is even greater: they must evolve from content repositories to integrated parts of their customers’ daily lives.
Recurly’s data reveals key insights into addressing this challenge:
- Flexible Pause Options: Businesses offering subscription pauses experienced a 68% year-over-year increase in usage, with digital media and entertainment seeing an extraordinary 330% rise.
- Declining Free Trial Effectiveness: Conversion rates from free trials dropped to 33% in 2024, down from 46% in prior years. This indicates the need for more tailored and impactful onboarding strategies.
- Reacquisition as a Growth Tool: Nearly 20% of new acquisitions in 2024 were returning subscribers, showcasing the cost-efficiency and impact of reacquisition campaigns.
What this means: These trends signal that retention must be a priority for businesses looking to grow sustainably. Companies that leverage flexibility and engagement tools can mitigate churn and deepen subscriber relationships. The report emphasizes that retention isn’t just about keeping customers—it’s about creating long-term value and loyalty.
Strategies for Long-Term Subscriber Retention
The report outlines several actionable strategies for businesses to enhance subscriber retention:
- Flexibility and Personalization: Offering tiered pricing, loyalty programs, and pause options are proven to reduce churn and increase satisfaction. For instance, merchants using pause features retained 51.7% of at-risk customers.
- Proactive Reacquisition Campaigns: Returning subscribers accounted for 20% of acquisitions in 2024, with digital media seeing rates nearing 25%. Reacquisition is often more cost-effective than acquiring new customers and can be driven by targeted marketing and data-driven segmentation.
- Technology Integration: AI-powered tools allow businesses to predict churn risks, personalize subscriber engagement, and automate recovery processes. These tools transform retention from a reactive effort into a proactive strategy.
What this means: Businesses must view retention as a growth engine, not a fallback. Integrating personalization, flexibility, and AI can help companies stay ahead in a competitive landscape, creating lasting relationships that translate into revenue stability. As subscriber acquisition rates continue to slow, those focusing on retention will lead to the next wave of subscription success.
Organizational Alignment as a Key Driver
Retention-focused strategies require a coordinated effort across teams, breaking down silos between acquisition, engagement, and product development functions. Aligning these units with shared KPIs ensures a unified approach to subscriber retention, making it a priority across the organization.
Recurly’s VP of Business Intelligence, Brian Geier, says, “The first week or month of a subscriber’s experience is essential for long-term retention.” This insight reinforces the broader message: businesses cannot afford to view retention as a secondary effort. Instead, it must be integrated into every stage of the customer lifecycle, from onboarding to daily engagement. By focusing on these critical early moments and delivering immediate value, companies can transform their services from transactional platforms into habitual, indispensable parts of customers’ lives.
This approach directly supports the report’s overarching call to action: retention is no longer optional for sustainable growth. Streaming services and other subscription businesses that successfully align internal teams around shared goals will be better positioned to foster loyalty and ensure long-term success in an increasingly competitive marketplace.
Looking Ahead
As acquisition rates slow, retention becomes a central focus for sustainable growth. Subscription businesses can build stronger, more lasting customer relationships by adopting a retention-first mindset and leveraging tools like flexible pricing models and AI-driven personalization.
The takeaway for streaming services is clear: retaining subscribers is no longer a secondary concern. It is the foundation for future success in an increasingly competitive landscape.
But we knew this. This year, let’s act on it.
