Is Consumer Subscription the Next Software Boom market?

Consumers are waking up to the pitfalls of “free” including intrusive ads, the sale of personal data and poor product quality.

HOWEVER, if consumers are finding a service useful and it becomes a part of their life, retention rates for the second-year approach 80–90% allowing CSS businesses to build extremely profitable cohorts of users that provide years of cash flow.

Consumers will always churn at higher rates vs. enterprise services and even the best consumer apps can expect first year churn to be 30–50%.

Unlike in the early days of the internet, consumers are now willing to pay for higher quality offerings, driving demand for CSS offerings.

So what is changing? The use cases for CSS and capabilities are exploding with hundreds of new companies launching! With their early start in entertainment, CSS applications are rapidly branching out to fitness with Aaptiv, astrology with Co-Star, hobbies such as surfing with Surfline, managing children’s sports teams with TeamSnap as well as hundr... See more

CSS is not revolutionary — the model has been proven before in entertainment. If you think about it, CSS is the next evolution of a cable subscription, where consumers are paying a monthly subscription fee in exchange for a service but ultimately do not own the TV shows or content they viewed. However, unlike cable, consumer subscription software c... See more

Consumers are adopting the model after becoming comfortable with Netflix and Spotify as the “Pioneer” CSS services. Now consumers are expanding their purchases to capture better experiences in broad and exciting new verticals including family communications, travel, exercise, hobbies and religion.

I believe Consumer Subscription Software (“CSS”) will quickly rival enterprise SaaS as the most exciting growth opportunity in software.