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Parks Associates: 77% of internet households participate in free loyalty programs

Twenty-eighth annual CONNECTIONS™ Conference addresses rise of subscription and membership services in the home

Parks Associates’ new consumer study of 8,000 US internet households, Subscription Memberships and Bundles: Shopping, Video, Gaming, Mobile, reveals 77% of US internet households participate in free loyalty programs, led by high-transaction providers such as grocery stores (45%) and credit cards (42%). This landmark study of the subscription economy explores current adoption of membership and subscription programs and opportunities to leverage these preexisting relationships to create new bundles and paid services.

Companies throughout the connected home ecosystem are pursuing opportunities to secure recurring revenues. Parks Associates will explore these strategies at its upcoming CONNECTIONS™: The Premier Connected Home Conference, May 7-9 at the Hilton Dallas/Plano Granite Park Hotel in Plano, TX. The conference features the session “Willingness to Pay for Connected Home Services,” May 8 at 10:15 am, where speakers from Comcast, Daisy, and Shipshape AI explore successful pricing models and strategies to monetize subscription-based services.

“Entertainment, convenience, resources, and discount/value are primary value propositions for subscription and membership services," said Elizabeth Parks, President and CMO, Parks Associates. “Many services offer a combination of value propositions – the right mix of benefits will depend on the customer target. We will continue to see consumer service providers partner and bundle various services to add value and stickiness to their offering.”

Almost all US internet households have at least one digital subscription. OTT video streaming services are the leading digital services and account for the highest average spend and the highest number of services used per household. Free loyalty programs can be an onramp to paid memberships. For example, Best Buy’s loyalty program started as a free reward service, and the retailer gradually built it up to a tiered membership program with My Best Buy Plus and My Best Buy Total. Target will be the next retailer to migrate from a free to paid membership program with Circle 360.

Creation and expansion of membership programs also creates opportunities for aggregators – e.g., broadband providers, cellular carriers, TV portals, and app stores – to expand their offerings and compete with other aggregators. For instance, in March 2024, Google added Fitbit Premium and Nest Aware to Google One plans for UK subscribers.

“Subscription providers should seek partnerships with aggregators to expand the reach of their brand beyond their own users,” Parks said. “We will see many new, unique, and creative membership opportunities from a variety of different players in 2024.”

To schedule an interview with an analyst or to request specific data, please contact Mindi Sue Sternblitz-Rubenstein at mindi.sue@parksassociates.com or 972-490-1113.

About Parks Associates

Parks Associates, a woman-founded and certified business, is an internationally recognized market research and consulting company specializing in emerging consumer technology products and services. Founded in 1986, Parks Associates provides business intelligence and research services through its proprietary methodologies developed over decades, including quarterly surveys of 10,000 internet households.

The company's expertise crosses many industries: home security and smart home, streaming video, broadband and pay-TV services, digital media and platforms, gaming, Wi-Fi and home networks, connected health, support, consumer electronics, home control systems, energy management, and tech solutions for the multi-dwelling (MDU), small-to-medium business (SMB), and commercial building markets.

Each year, Parks Associates brings thousands of leaders together for its webinars and annual events. The firm hosts the annual executive research and strategy conferences CONNECTIONS™, Connected Health Summit, Smart Energy Summit, Smart Spaces, and Future of Video. https://www.parksassociates.com

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