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Subscription October 2018 Commerce Tracker™ SUBSCRIPTION OCTOBER 2018 COMMERCE TRACKER™ TAO CONNECT’S SUBSCRIPTION- BASED MODEL FOR MENTAL HEALTH SERVICES – Page 6 (Feature Story) AMC Stubs A-List program surpasses 380,000 How subscriptions are changing the way members in first three months consumers stay fit powered by powered by – Page 10 (News and Trends) – Page 14 (Deep Dive) TABLE OF CONTENTS 03 What’s Inside 10 News and Trends New players and industries take their The latest subscription developments first steps into the subscription market, from Apple, Microsoft, Forever 21, Porsche while others expand existing subscription and more experiments and find new partners 14 Deep Dive 06 Feature Story Digital Fitness And Subscriptions TAO Connect’s founder, Dr. Sherry Connected devices are giving fitness buffs Benton, and its CEO, Bob Clark, discuss access to health data on a regular basis, how the company’s subscription-based fueling a market that’s projected to be worth approach to mental health expands $27.4 billion by 2022. This month’s Deep Dive access to resources and bypasses explores how fitness subscription services are geographical and societal barriers offering consumers more flexible options to pursue healthy activities 16 About Information on PYMNTS.com and Recurly SUBSCRIPTION COMMERCE TRACKER™ ACKNOWLEDGMENT The Subscription Commerce Tracker™ is powered by Recurly, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the findings presented, as well as the methodology and data analysis. © 2018 PYMNTS.com All Rights Reserved 02 WHAT’S INSIDE CONSUMERS ALREADY HAVE ACCESS to a wide range of subscription services and products, from Vehicles, home electronics and power tools are not the only meal kits to streaming media and even movie tickets. But products being offered through subscription services, of in recent weeks, the subscription model has undergone course. In recent weeks, several companies from a variety of several major changes. Some companies are taking their industries launched subscription models, hoping to change first steps into the subscription model realm, while others the way consumers access services from fitness to fashion are expanding existing subscription services to reach a to movies. broader consumer base. Notable subscription headlines After starting a subscription pilot program last year in At- lanta, Porsche is ready to take its experiment on the road Gyms are no strangers to the subscription model, with by expanding to different regions. The subscription service, many requiring monthly or annual memberships for access. Porsche Passport, offers subscribers access to Porsche vehi- Now, a new subscription model, called fitness-as-a-service, cles for $2,000 to $3,000 per month. provides travelers a more flexible option that gives them access to gyms while on the road. Localfit is offering As Porsche expands its existing subscription model, a pair fitness-as-a-service by allowing subscribers access to of European technology companies are making their first select gyms with a prepaid card. Founder Rob Gilliam subscription ventures. Philips is considering a “try before recently told PYMNTS that 462 million traveling you buy” subscription offering that would allow consumers workers could make use of the service. to test products, like electric razors, before purchasing them. Electronic tool manufacturer Husqvarna Group, meanwhile, Subscriptions are also a hot look in the launched a subscription pilot that gives subscribers access fashion industry, and with a recent $8 million to power tools, such as chainsaws and leaf blowers, on a investment in fashion subscription service pay-per-use basis. DailyLook, clothing retailer Forever 21 © 2018 PYMNTS.com All Rights Reserved 03 WHAT’S INSIDE is one of several companies taking its first step into the subscription market. The investment will allow Forever 21 to tap into DailyLook’s data-driven approach to fashion to build stronger relationships with its customers. Fashion isn’t the only industry that’s rolling out the red carpet to subscribers. Since its launch, movie theater chain AMC Theatres’ Stubs A-List service has surpassed 380,000 subscribers, far exceeding company expectations. Based on recent activity, AMC is expecting movie theater attendance to increase for the first time in three years. A smartphone-based subscription system for mental health In addition to encouraging consumers to engage in fashion, fitness and movie theater outings, subscriptions are also finding a place in mental health care services.TAO Connect is a mental health services platform that uses smartphones to connect subscribers with mental health professionals and resources. Founder Dr. Sherry Benton and CEO Bob Clark discuss how the subscription model helps patients, regardless of geographical and societal barriers, connect with mental health services. Deep Dive: digital fitness Thanks to always-on connected devices, including smart- phones and wearable devices, fitness buffs have increased access to their health and fitness data. This ease of access is fueling a market that could reach $27.4 billion by 2022 as more people turn to mobile apps to help them achieve their health goals. This month’s Tracker includes a Deep Dive that explores how subscription fitness services are helping consumers by offering flexible options that make exercise routines less of a workout. © 2018 PYMNTS.com All Rights Reserved 04 WHAT’S INSIDE Five Fast Facts5 Projected value of the global digital $536.6B health market by 2025 Anticipated CAGR of the global digital 32.6% fitness market from 2017 to 2022 Estimated value of the U.K. subscription $1.32B box market by 2022 Share of IT professionals who believe 73% almost all apps will be operating as Software-as-a-Service by 2020 Estimated number of Amazon Prime 275M subscribers in the U.S. by 2029 © 2018 PYMNTS.com All Rights Reserved 05 FEATURE STORY © 2018 PYMNTS.com All Rights Reserved 06 A SUBSCRIPTION PRESCRIPTION TO BOOST MENTAL HEALTH ACCESSIBILITY ccording to the latest figures available from the National Institute of Mental Health, approximately one in five Americans — 45 million people — are afflicted by some typeA of mental health condition. Despite the fact that mental health is a widespread problem “An online solution,” TAO Connect’s CEO, Bob Clark, said, in the U.S., there are several barriers to accessing services — “can solve a lot of those geographical barriers to access.” including geography. The U.S. Health and Human Services Department reports that roughly 111 million people live In a recent interview with PYMNTS, Clark and Dr. Sherry in “mental health professional shortage” areas, making it Benton, TAO Connect’s founder and chief science officer, challenging for patients to reach local professionals. explained how the company relies on evidence-based tools and machine learning (ML) to gauge a patient’s needs, TAO Connect believes that smartphones could offer a and help therapists and patients better understand their gateway, virtually connecting patients to mental health progress. services through a subscription-based pricing model, similar to that of over-the-top (OTT) streaming services and Expanding mental health access meal kit deliveries. TAO Connect licenses its services to colleges, universities, TAO, which stands for Therapy Assistance Online, hospitals and medical networks, which then make the offers subscribers access to screening services, video service available to the students or patients they cover. conferencing with mental health professionals, educational In addition to this B2B service, the company also offers modules, gamified tools and other interactive resources subscriptions directly to consumers. that can be accessed via smartphone. Subscription plans can be purchased as either a monthly or yearly plan. © 2018 PYMNTS.com All Rights Reserved 07 FEATURE STORY The inspiration for the service came from Dr. Benton’s “We got a lot of phone calls saying, ‘We need a way to earlier work as the director of counseling for a university. get to this,’” Dr. Benton said. “Selling it to individuals on a The university’s counseling center often struggled to meet pay-per-month basis came from demand from students who the high volume of demand from students, and placing were using [the service] at universities.” students on a waitlist can prolong their mental health problems, exacerbate their effects and even take a toll on their academic careers. “My hope is that we can stop letting mental “If you make a student who is pre-med wait five weeks to health care be something that is just start treatment for depression, they’re going to lose their for the rich and for people in areas and whole semester and it could affect their entire future,” Dr. concentrations where there are therapists.” Benton said. TAO decided to offer a B2C option after hearing that undergraduate students, who used the service while under A subscription-based cure for social stigma the coverage of their college or university, wanted to Making mental health services available through a smart- continue using it after graduation. phone could also address why some don’t seek treatment in the first place. A subscription-based telemedicine approach means users don’t have to show up to counseling centers or fit appointments into their schedules. Instead, they can engage with the platform and communicate with mental health professionals at their convenience. Subscription-based models also offer another benefit: Users who might feel uncomfortable visiting a mental health center can access resources with their privacy largely intact. “It allows people who are concerned how they might be viewed an outlet to access mental health without anyone knowing,” Clark said. “It may not change the stigma, but it certainly allows [more access for] people for whom the stigma was a problem.” Enhancing mental health engagement with data Easier access, however, does not always ensure engage- ment. Earlier iterations of TAO Connect offered resources that relied on people talking to each other and working with educational materials that, while insightful, ultimately failed to retain users.
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