Subscription Apps Grow Globally
4 Brands Getting It Right in Europe and Latin America
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Global economic downturns might have you feeling understandably grim about the future, but there’s one industry that’s proven to be resilient: the mobile app subscription market. 50% of brands relying on subscription revenues are growing as fast as they were before the pandemic, and 18% have shown accelerated growth (greater than 25%) since early March.
A recent industry forecast shows that global spending in mobile apps will surpass $100 billion for the first time in 2020, increasing by about 20% year-over-year. The report also predicts that by 2024, revenue from non-gaming apps will exceed mobile games for the first time, a shift largely driven by — you guessed it — growth in media, music, and lifestyle subscription apps.
This resilience is particularly promising in regions like Europe and Latin America (LATAM). LATAM is now the world’s second fastest-growing mobile market, boasting a mobile-first population with 62% smartphone penetration (247M users). In 2018 alone, Brazilians downloaded over 7.3 billion apps, ranking fourth in the world, and the country saw a 40% growth in app downloads from 2016–2019.
Similarly in Europe, the subscription economy has grown by 64% (compared to 48% in the US) over the past two years. Recent research shows that Europeans spend about 130 euros a month, or 5% of all their spending, on subscriptions, thanks in part to an ongoing shift in consumer preferences. As consumers sign up to get everything from groceries to glasses via a subscription model, the trend for convenient, affordable app subscriptions will likely continue to rise as well.
Here, discover four brands who have mastered the mobile subscription model to achieve impressive growth in Europe and LATAM.
Canal+
French premium television channel Canal+ has seen a hefty spike in users recently, rising to 20.3 million subscribers from 17.2 million subscribers in 2018. The media brand has experienced growth thanks to a partnership and aggregation strategy that adds value for new and existing subscribers. In addition to distribution deals with every major telecom company in France, Canal+ has programming deals with UEFA for the Champions League, Disney+, BeIN Sports, and OCS, which includes all HBO content and a selection of live TV and on-demand content. Most notably, the company recently began offering a bundled subscription with Netflix, creating a one-stop shop for customers in search of the best international streaming content under one convenient and affordable monthly plan.
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Spotify Premium
Spotify Premium is another prime example of subscription success, with over 138 million paid subscribers worldwide, up from 108 million in 2019. Over a fifth of those paying subscribers (21%) are in Latin America, where Spotify has seen its second-fastest growth this year (the platform saw a 33% spike in the second quarter of 2020, increasing to 29 million subscribers in LATAM alone). This regional growth is largely due to the brand’s savvy localization strategy. Spotify leverages localized listening data to find rising local artists, which they then add to playlists like the Top 200 and Viral 50 global songs. These playlists not only appeal to listeners in a target region, they also help the brand grow its audience on a global scale. Additionally, Spotify recently made a $500 million investment in original podcasts, continuing to create localized content in growth markets like LATAM. The Spotify Original podcast Fausto has quickly risen to become a top podcast in Mexico, giving listeners all the more reason to become paid subscribers to the app.
Deezer
While French music streaming service Deezer only counts 2% market share in global music streaming, the platform is enjoying success in emerging markets like LATAM. In fact, Deezer is the second largest streaming service in Brazil. So how have they done it despite going up against competition like Spotify? Largely thanks to strategic partnerships, like a deal they recently inked with Mexican media brand TV Azteca. Through the partnership, Deezer will host a weekly live TV show and acquire social music app Mugo, sunsetting the app and transitioning its users to Deezer by offering a free Deezer Premium trial. Globally, Deezer continues to find resilience via major partnerships with Samsung, Toshiba, Sonos, and Bose, all of which have helped the brand scale to 16 million MAU across 180 countries.
Netflix
And of course, we can’t talk about app subscription success without mentioning Netflix. In the second quarter of 2020, the streaming platform had nearly 193 million paying subscribers worldwide, adding 26 million paid new subscribers in the first two quarters of 2020 alone — almost as many as the brand added in total in 2019 (28 million). The bulk of this recent subscriber growth is happening internationally, particularly in LATAM. From March 19 to April 9, both Brazil and Mexico saw a 27% and 63% increase in daily downloads, respectively. This surge can be attributed to a focus on localized content; it’s estimated that since 2017, Netflix has released 191 titles in Latin American languages. This year, the brand is set to invest $97M in Brazilian productions and will launch up to 30 new titles for the market. Netflix also forged a partnership with Mexican telecom provider Telmex, integrating streaming subscriptions into five of the company’s telecom plans.
If 2020 has proven anything, it’s that consumers around the world demand products and services that are convenient and personalized. App subscriptions are the perfect way to meet both of those demands at once, while also providing brands with ample user data to inform everything from content development to pricing to marketing campaigns. Not to mention, subscriptions are an ideal model to generate recurring revenue and increase customer lifetime value.
Whether you’ve already developed a subscription model or are looking to expand a different approach across the globe, our recent App Monetization Whitepaper offers all the insights and strategies you need to make your mobile brand resilient and ready for growth. Click here to download your copy.
