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Subscription Economy vs. Sharing Economy: Who Wins?

There's no denying that the way we conduct business is changing.

Technology development over the last few decades, particularly the availability of high-speed mobile Internet, is driving unprecedented change throughout all industries.

Disruption in this area is coming from new business models found in the subscription and sharing economy. Companies like Uber, Airbnb, TaskRabbit, and WeGoLook fall squarely into the billion dollar sharing economy.

Whereas on-demand giants like Netflix, Hulu, and Spotify form the foundation of the $400 billion U.S. subscription industry.

I don't know about you, but I can't live without House of Cards. Nor can I see myself going back to taxies after spending so much time using Uber.

No doubt that these new business models have become ingrained in our daily lives. But how do they stack up to one another?

House of Cards vs. house-sharing? That sounds like a fun discussion.

What is a Sharing and Subscription Economy?

Although many terms are thrown under the sharing economy umbrella, it simply means an online platform where peer-to-peer (p2p) exchanges of services and goods are conducted.

These p2p exchanges can be homes, cars, skills, labor, consumer items, and so much more.

The subscription economy, on the other hand, is a term that describes a business model where customers pay a periodic fee (a subscription) to gain access to the desired products and services.

Subscription business models have been with us for a long time, with magazine and newspaper subscriptions being well known and established across the globe.

But with companies like Netflix and Spotify, the subscription economy is experiencing a type of renaissance.

Both Industries: Q&A

Q: What are both of these industries worth?

A: According to PwC, in 2014 the sharing economy generated $15bn in global revenue. By 2025 however, the sharing economy will have a potential revenue opportunity of $335bn. And, the subscription economy was worth about $200bn in 2000, and is now estimated to be worth over $400bn.


Q: Isn't this just a millennial thing? Maybe they're rebelling against their Baby Boomer parents?

A: Not a chance! Both the sharing and subscription economy's are popular among all age demographics, particularly Baby Boomers.


Q: Aren't these new industry labels quite broad? You can share or subscribe to anything really...

A: You're absolutely correct. But it's not the concept of sharing and subscribing that's at the heart of this, it's how these old principles are delivered. Online marketplaces and mobile technology have enabled these relatively old consumption models to be reinvented in a digital format. And people love it!


Q: So who wins, the subscribers or sharers?

Who Wins? They Both Do...

The real shift here is two-fold. First, we are currently in the midst of a shift in how we consume -- from an emphasis on ownership, to one of access.

Secondly, more and more people are valuing convenience over all other consumer needs.

The result? The massive growth in both the subscription and sharing economy.

Both are premised on access and convenience over all else. Why go to a movie store to rent a physical movie when you can stream it on Netflix?

Why buy a CD at the store when you can pay for access to it on Spotify?

Why own a car when you can use an Uber? The sharing economy rids users of the burden, or should I say inconvenience, of ownership.

You get the point.

So the growth in popularity of both of these industries is the result of similar shifts in how we as a society consume.

Who wins then? They both share the victory in our opinion.

Final Thoughts

Come to think of it, maybe our reasoning about this all wrong. Perhaps subscription and sharing fall into a larger, complimentary, category of the 'on-demand' economy.