For over a decade, the model has carved out its own niche. From streaming giants like Netflix, Amazon Prime Video, Disney+, Hulu, and HBO Max (now Max) to SaaS (software-as-a-service) startups and direct-to-consumer services, recurring revenue has become a winning formula for businesses.

Very few business models that benefit both parties, such as the subscription model, have emerged so far. For customers, all they need to do is pay a set fee at regular intervals to gain ongoing access to the product or service, which is tailored by industry and offering, ranging from physical goods and digital content to software and services.

For service providers, the subscription model provides a consistent revenue stream that can thrive during prosperous economic times. Additionally, it enhances customer retention by offering more tailored services.

However, the trend points out that subscription fatigue is setting in. The term refers to consumers’ growing reluctance to engage with an ever-expanding roster of recurring payments, and this is fast becoming a concern for business leaders and investors.

With consumers re-evaluating their digital wallets and churn rates rising, it is time to ask: Has the subscription economy peaked, or is this merely a necessary recalibration in a maturing market?

Saturation fatigue kicking in?

A phenomenon called “subscription fatigue” occurs when consumers feel overwhelmed and frustrated by the increasing number of subscription services and products available. While this phenomenon is particularly prevalent in the media and entertainment industry, it has now spread to other sectors like FMCG (fast-moving consumer goods) and software.

The proliferation of subscription offerings can burden consumers with multiple monthly fees and the complexity of managing numerous accounts. Also, the variety of subscriptions makes it more challenging to keep track of expenses and fully utilise the services or products. This can lead users to question the value they are getting from their subscriptions, potentially causing disengagement.

The subscription model was celebrated as a sign of forward-thinking business strategy. The model delivered steady income streams, customer loyalty, and higher lifetime value. It transformed product categories, turning everything from software and entertainment to pet food and razors into services.

According to data from Zuora’s Subscription Economy Index, between 2012 and 2022, the subscription economy grew by more than 435%. SaaS companies like Salesforce and Adobe became household names. The craze was so high that even carmakers began experimenting with subscription-based access to vehicle features.

It’s not that the model is crumbling. It’s just that cracks have started appearing as the business model scales. A MarketWatch survey indicates a growing trend of subscription fatigue among consumers. Of the 1,000 surveyed Americans who pay for subscription services, 22% felt they weren’t getting their money’s worth.

When respondents were asked about their current subscriptions and spending habits, MarketWatch found that the median subscriber has four subscriptions and spends about $60 per month ($720 annually). Some reported much higher spending habits, with monthly costs reaching $250 ($3,000 annually) or more for subscription services. One in five (19.9%) even admitted they didn’t know exactly how many subscriptions they were paying for.

What drives the fatigue?

A recent academic paper published in the Proceedings of the Third International Conference on Optimisation Techniques in the Field of Engineering (ICOFE–2024) took a deep dive into the subscription phenomenon. Titled “Statistical Analysis of Subscription Fatigue: A Growing Consumer Phenomenon,” the study investigated the psychological and behavioural triggers behind subscription fatigue.

The report identified three key drivers: lack of perceived value, hidden or unpredictable fees, and loss of control. As more companies adopt subscriptions, the uniqueness of the model has eroded. Many users now feel they are paying regularly for content or services that deliver little incremental benefit. Consumers are increasingly frustrated with tiered pricing, automatic renewals, and freemium models that lead to unexpected charges.

Finally, the inability to seamlessly manage or track multiple subscriptions is contributing to a growing sense of overwhelm, leading to attrition. Combined, these factors are eroding loyalty and trust, two foundational elements of the subscription promise.

In Deloitte’s “2025 Digital Media Trends Survey” of 3,595 American consumers, 41% stated that the content available on streaming video services isn’t worth the price. This marked a 5% increase from 2024, indicating growing frustration with subscription services’ offerings.

In comparison, 22% of respondents in MarketWatch’s subscription fatigue survey felt they weren’t getting their money’s worth. In 2024, 40.3% said they had cancelled a subscription service. The most commonly cancelled service was video streaming (54.5%), followed by music streaming services (22.9%).

“We also asked respondents which subscription service they’d keep if they could only keep one— 45.2% said they’d keep their video streaming account over other subscription services. Specifically, when asked which subscriptions they’d keep, 20.6% said Netflix, 16.2% said Amazon Prime, and 5.7% said Hulu. According to our survey, two primary reasons people cited for cancelling a subscription were cost and quality. The most common reason for cancellation was overall budget cuts, suggesting that subscriptions aren’t the only area where consumers are reducing expenses. However, 50.5% of customers reported resubscribing to services they’d previously cancelled, indicating most cancellations aren’t permanent,” the report noted.

Nearly 55% said they would cancel a subscription if the service dropped in quality, while only 35.5% said they’d cancel if it increased the number of ads. Also, 36.8% of subscribers would cancel if the service’s monthly price increased by $6–$10.

Numbers behind the trend

While full-scale subscriber withdrawal is unlikely, things are clearly entering a more mature, and arguably more volatile, phase. A 2024 report from Antenna, a subscription market analytics firm, revealed that churn rates for video-on-demand services reached an all-time high of 44% in Q4. SaaS businesses are also facing rising customer acquisition costs and declining net revenue retention, a double hit that undermines the long-term profitability of the model.

Consumer surveys tell a similar story. According to the UK’s Department for Business and Trade, which has launched a consultation on measures to crack down on what they call “subscription traps,” nearly 10 million of the 155 million active subscriptions in the country are unwanted, costing consumers £1.6 billion annually.

Deloitte’s 19th annual “Digital Media Trends” report found that consumers are increasingly dissatisfied with the value of paid streaming services. Even though 53% of consumers surveyed say they use streaming video-on-demand services most frequently, nearly half (47%) believe they pay too much for these services, and 41% think the content offered isn’t worth the price (up 5% from 2024). A price hike of $5 would likely prompt 60% of consumers to cancel their favourite service.

However, not all subscription businesses are experiencing the same levels of fatigue. Some have weathered the storm better than others. The difference lies in how well the service aligns with customer value and how flexible the business is in responding to changing expectations.

Services that are genuinely essential to day-to-day living, like high-engagement entertainment platforms like Spotify or Disney+, productivity tools like Microsoft 365 and Dropbox, or health and wellness platforms like Strava, typically have higher retention rates. These businesses have made significant investments in individualised features or content, frequent, obvious product changes, and transparent pricing and cancellation procedures. Most importantly, they make it simple for clients to comprehend what they are purchasing and why it is worthwhile.

Still, many niche services or companies with little product differentiation are struggling. Despite having 45 million subscribers, Apple TV+, for example, reportedly incurs over $1 billion in annual losses. The platform captures less than 1% of the total American streaming viewership, lagging behind competitors like Netflix. High production costs and limited audience engagement have contributed to this subscription model’s financial struggles.

In short, the era of “everything-as-a-subscription”, from digital fitness classes to premium recipe apps, is now being curtailed by consumer pragmatism. Similarly, businesses that rely on passive engagement (the assumption that users will forget to cancel) are seeing this strategy backfire. With fintech tools and banking apps now offering subscription tracking and cancellation features, one can see that the days of accidental renewals are becoming a thing of the past.

End of the road?

The golden era of subscriptions was driven by novelty and investor enthusiasm. But, like all financial trends, the hype curve has eventually levelled off. And now, there is also a need for quality and sustainable economics.

Once fixated on monthly recurring revenue, investors are now paying more attention to unit economics. How much does it really cost to get and keep a subscriber? How much time does it take to get the money back? In the absence of aggressive discounting, is the model still feasible?

Subscription businesses globally are now facing the challenge of evolving. In many cases, that means offering hybrid models that combine one-time purchases with added subscription perks and creating modular pricing tiers that better reflect real usage patterns. Rather than chasing pure subscriber volume, companies are increasingly focusing on metrics like net retention and user engagement. The digital economy is adopting a more resilient approach to long-term success, rather than sticking with a growth-at-all-costs mentality.

The ramifications are substantial for corporate strategists and financial experts. Today’s subscription-based companies must decide if their business model is supported by customer inertia or if it actually reflects actual consumer value. They also need to think about the measures that are in place to guard against churn shocks, especially when the economy is struggling. Making quick changes to pricing and packaging is essential, as is making sure that dashboards and KPIs track retention quality rather than just subscriber count. Additionally, it is time to review valuation models. Stability is still provided by recurring revenue, but the premium investors place on the model might need to be adjusted. Having subscribers is no longer sufficient; you need subscribers who stick around.

While the subscription model has revolutionised many industries, the rise of subscription fatigue signals a shift in consumer behaviour. Businesses must adapt by offering better value, transparency, and flexible pricing to retain loyal customers in an increasingly competitive market.

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GBH Insights’ analyst Daniel Ives said: “It’s a mind-boggling number that serves as a key barometer to how big Amazon’s kingdom has become.”

The company also plans to push Prime in an effort to power sales at brick-and-mortar supermarket Whole Foods. Ives said Prime is regarded as a ‘competitive moat’ because it makes it harder for online and offline retailers  to draw customers to their stores, reported Daily Sabah.

US President Donald Trump’s recent Twitter feud with Amazon caused worry that his administration might curb Amazon’ expanse. However, the Prime service’s growing popularity only indicates market development.

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The telecom sector in India is expanding from a network service to a data-driven support after the entry of 4G operator Reliance Jio. Jio had 168mn broadband subscribers by the end of January, Airtel had 75mn and Vodafone had 55mn, reported Economic Times.

Being in a heavily competitive industry, receiving more subscribers based on content programming is a challenge. CEO of Content and Apps, Bharti Airtel, Sameer Batra said: “The ecosystem has now become more conducive to content and these offers will be a great differentiator.”

“If we are able to lock in consumers via digital services, the propensity to stay on is very high and will also help get customers get onto 4G.”

In addition to sports, telecom operators are looking at other forms of content to retain existing users and attract new ones. Airtel offers free Amazon Prime subscriptions to users who are willing to recharge above a specified limit, Vodafone India offers free Netflix membership and Idea Cellular has signed content partnership with other providers such as Eros, Balaji and Sony Music.

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