Challenging the Old Playbook: Subscription Titans Turn to Indirect Acquisition Strategies

The world of subscription services is at a tipping point. The well-trodden path of direct-to-consumer (DTC) acquisition, marked by sweeping swathes of paid media across social and search channels, is nearing its expiry. Despite vast marketing budgets and towering subscriber counts, industry titans like Netflix and Spotify have begun to buckle under the weight of ballooning customer acquisition costs (CAC). With nearly half of subscription leaders describing their direct marketing expenditure as a ‘black hole,’ the landscape is ripe for a new, more sustainable growth model. Enter the era of indirect acquisition. Top players are swiftly steering their resources towards alternate avenues such as partnerships, platforms, and multi-service bundles. Using indirect acquisition strategies presents subscription leaders with an opportunity to nestle their offerings within large-scale, trusted ecosystems comprising telcos, banks, retailers, and device makers. Indirect acquisition isn’t merely a response to the sustainability crisis facing DTC. It’s also forging a path that is more aligned with changing consumer behaviors. Consumers now crave flexibility, simplicity, and value—something that the friction of maintaining separate apps and billing cycles doesn’t provide. These shifts in the sector are markedly evident. Not only do 82% of subscription leaders intend to up their stake in indirect acquisition this year, but a whopping 90% are also either bundling already or have plans to do so. Bundling has emerged as a significant player in the indirect acquisition landscape, a trend that is underscored by the fact that subscribers acquired through indirect channels generally offer a higher lifetime value. Indirect acquisition is more than a fad; it is forging a new playbook for subscription services, one that goes beyond bundling. From device partnerships to perks-based loyalty collaborations and workplace benefit programs, indirect methods are proving an invaluable asset in the quest for growth. For subscription service leaders, turning the tide on the direct marketing ‘black hole’ and championing indirect acquisition strategies may well be the rocket fuel needed to shoot for the stars.