How direct response marketing is driving the subscription boom

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You may have noticed over the course of the last year or two that subscription-based companies have become significantly more prevalent. A few years ago, the idea of a subscription service would probably have made you think first of digital entertainment. For instance, companies like Netflix and Hulu provide us with film and television content for a subscription fee; Spotify does the same with music, and we can even rely on services like Gamefly and Xbox Live for video game content. But these days, the subscription model has moved well beyond digital entertainment and now applies to a huge range of companies putting out all kinds of different products.

What exactly is driving this evolution? In part, it’s that people feel they’re saving money when subscribing to companies rather than buying individual products – and a lot of the time that’s perfectly true. For instance, a company like Blue Apron, which delivers ingredients and recipes to your door, can essentially be proven to save a household money on takeout and groceries. However, it’s not all about affordability. The boom in subscription services can also be tied pretty directly to a successful marketing concept that’s caught on in a big way.

Put simply, it’s a direct response marketing approach that’s working wonders for subscription services, and it makes a lot of sense. With a DRM approach, a company is not just seeking to make consumers aware of its brand, but rather to tell them how they’ll benefit from a purchase, and to give them an easy way to make such a purchase. The idea is to communicate the company’s purpose and ease of use in order to generate sales – and through those sales, to track customers and determine whether or not the pitch is working.

This is a marketing approach that can’t be done successfully with the average online advertisement. However, it works exceptionally well with audio formats, and that’s why you may have noticed the subscription service boom is directly tied, in many cases, to the rising popularity of podcasts. Podcasts have become the new radio for younger generations, except that they’re more varied than radio stations have ever been. Users who have gotten into the podcast trend know where to find shows and hosts that speak directly to their interests, and it’s for that reason that we’re seeing explosive growth in the podcasting industry.

The connection comes from the fact that most users don’t want to pay for their podcasts. And in more and more cases, they don’t have to. The revenue model for podcasts depends almost entirely on advertisement, rather than direct consumer purchases. Companies that sponsor podcasts will released DRM material for the hosts to read aloud at interludes during their shows. And as mentioned, audio can be an ideal medium for this type of marketing. A podcast host can, in 30 seconds or so, explain a common problem, communicate how a sponsoring company can help with that problem, and offer listeners a special promo code or something of the like with which they can affordably test the product or service at hand.

Most of the companies that are advertising regularly on popular podcasts are in fact subscription service models, which benefit particularly from the explanation-based style of DRM. These are still fairly new companies, and consumers need to be convinced of their utility. But through the cycle of rising podcast popularity, sponsoring advertisers, and DRM live reads, you can begin to see how a simple marketing strategy is responsible in large part for the rise of subscription-based businesses.