There was a time when you heard the word subscription and all that came to mind was Netflix and that monthly gym membership you used twice and then never went. Cut to 2026, and monthly memberships and subscriptions are ubiquitous. Your car’s remote start needs a subscription, and so does your printer’s ink cartridge. Even your coffee beans have a monthly membership plan.

There’s a reason why your car manufacturer and your cappuccino vendor are all selling memberships. It’s got to do with recurring revenue. Businesses get more repeat revenue from selling access to a product or service on a regular basis than what they would from a one-time sale, even if it’s a pretty big one. Consumers are happy with the convenience and savings, but there’s also sound business logic behind the subscription and membership economy.

The numbers behind monthly memberships

Here’s how big the membership economy has gotten. A C&R study in 2024 found that the average American spends $219 a month on subscriptions. West Monroe put the number even higher, at $273 a month, and this was back in 2021. We can only assume that the numbers have gone up more since, considering inflation. This isn’t a U.S.-only trend either. A Zuora survey found that at least 78% of adults globally had a subscription of some sort.

Subscriptions are less of a niche trend now and more of a reliable way to make money every month.

What it takes for the membership model to succeed

Not every membership model works. Amazon Prime, with over 200 million worldwide and 180.1 million in the U.S., and Netflix, with 325 million paid subscribers, are proof that it can work really well. But Quibi and Blue Apron, which are now cited as cautionary tales, prove that it can fail. Then, there’s BMW, which for some reason thought it would be a great idea to charge for heated seats. Customers were not happy, and the blowback forced the car maker to abandon the plan.

The success of a monthly membership model is tied to the value customers see in continuing to pay. Businesses that clearly communicate that value before purchase and deliver on it after are the ones that do well.

Member-only discounts, exclusive offers, loyalty perks, and priority or early-bird access are all examples of the value members look for and the things that keep them coming back. Businesses should also make billing transparent, cancellation easy, and benefits simple to access. Even a great offer loses members if the whole thing is confusing.

There’s a clear demand for memberships, and it’s growing. Gen Z spends more per month ($377) on subscriptions than any other generation. Millennials are second, spending $276 per month. These generations grew up with subscriptions as the default, not the exception. While this is good news for businesses looking to cash in, it also means these customers may be more willing to switch when a new membership offers better value.

Before launching a membership model, there are certain questions businesses should ask themselves.

  1. Is the value renewed each cycle?
  2. Does the customer feel that renewal is worthwhile?
  3. Is there a one-time purchase that would work just as well as an alternative?

Get those right, and the economics of a monthly membership can work for other businesses too, just as they did for Adobe.