The direct to consumer subscription economy – where consumers pay a monthly fee to buy goods and services directly from the manufacturer or producer – was already gathering steam before the coronavirus pandemic. However, that has effectively turbocharged it.

DTC subscription brands are growing fast. In fact, a study from software company Zuora showed that in Q4 2020 subscription businesses grew 7x faster than the overall rate for the 500 biggest companies listed on the US stock exchange.

Driven by the adoption of digital technologies, the unending quest for efficiency and the trailblazing exploits of early pioneers, companies and investors are now piling into a space that can be traced back to the 1800s when people paid milkmen for regular deliveries before pay-TV broadcast services such as BSkyB effectively ushered in the modern era.

So for rights holders, there’s certainly a lot of potential: there are more brands to engage and there are more doing well – either from sales revenues or funding rounds.

At the same time, the increasingly saturated market means sponsorship can provide a compelling story about how to generate preference among consumers, particularly over competitors as there are already some questions about whether subscription fatigue is setting in among consumers. Sponsorship is also a great vehicle for generating larger brand awareness beyond the early adopter segment, crucial if brands are going to survive in an increasingly cluttered environment.

According to Zuora, 78% of adults hold at least one subscription service while Deloitte say 16% of 25 to 34-year-olds in the UK now have at least three subscriptions as the model has begun to permeate more sectors.

The entertainment sector was the forerunner, driving the shift from ownership to usership, through the likes of LoveFilm (which is now Amazon Prime), Spotify and Netflix onto the “subscription box” services such as Dollar Shave Club and Harry’s in personal products and to HelloFresh, Gousto et al in the food and meal kit delivery sectors.

Indeed, according to Royal Mail, 37% of subscription box subscribers have a food subscription followed by 30% for razor/shaving and 26% for cosmetics.

The pandemic has also been a particular boon to a newer entrant to the subscription world – health and wellness services such as Happify, Headspace and Calm. So, it is this sector along with food & beverages and personal products that caytoo’s DTC Subscription Brands report focuses on.

However, the shift from ownership to usership is also seeing subscription services begin to permeate other sectors such as automotive and accommodation so do look out for future editions that will incorporate more of those coming to the fore.