Online Subscribers Eager to Pay More for ‘Extras'

People who subscribe to online services say they’re willing to pay a little more for extra benefits, including premium content according to a new study.

A survey of 1,000 U.S. adults with at least one subscription conducted for Vindicia found that video services—such as Netflix, Hulu and HBO Go—were the most important to them, outranking shopping services and audio services.

Those subscribers can be upsold. The survey said that 76% of consumers were willing to pay an extra $3.99 a month for a subscription that gives the special access to premium content or members-only benefits. A more impressive percentage—84%—said they’d pay $1.99 extra for the bonus benefits.

Why do people cancel the subscriptions? The survey said 39% of those polled didn’t see the value of the subscription, 36% they no longer wanted the financial obligation and 34% said the subscription was no longer relevant to them.

"Vindicia's subscription survey offers two compelling truths," said Gene Hoffman, CEO of Vindicia, a subscription billing company. “First, as long as service providers deliver sustained and obvious value for money, customers will stick around. Second, demand for value-added benefits is so high that service providers can consider it a reliable avenue for significant business expansion. Our survey found that despite the notion that consumers don’t want to add significant financial obligations to their lives, they are very willing to pay for the services they value.”

A good number of online service subscribers use their subscription often. The survey found that 30% said they use their most-utilized subscription service at least 20 hours a week, while 28% use them 11 to 20 hours per week.

The most important attribute of a favorite digital service is value, followed by cost saving, selection and last, personalization.

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.