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SUBSCRIBED / FALL 2017

The SEI is still growing at around 80% of its peak growth rate of 21.6% in Q3 2016, while the GDP is now growing at just around 30% of that Q3 2016 peak of 3.5%.

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1 Q

Q

4

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16

16

20 3

2 Q

Q

16

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15 Q

1

20

15

20 4 Q

15

20 3 Q

15

20 2 Q

14

20 1

4 Q

S&P 500 Sales Index

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14

20 3 Q

14

20 2 Q

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20 1

4 Q

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20 4 Q

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SEI

16

100

17

120

US Retail Sales Index

Quarterly levels of the Subscription Economy Index™ (SEI), in comparison to indices of the S&P 500 Sales per Share and U.S. Retail Sales. All indices take a base value of 100 on January 1st 2012, and grow in proportion to the quarterly increase in the one year trailing total sales that they measure. Over a period of just over 6 years (January 1, 2012 to March 30, 2017), the SEI grew at an average annual rate of 15.2%. The S&P 500 Sales grew at an average annual rate of 2.0%, while U.S. retail sales grew at an average annual rate of 3.4%.

SUBSCRIPTION ECONOMY VERSUS U.S GROSS DOMESTIC PRODUCT

25%

4.0%

3.5% 20% 3.0%

2.5%

15%

2.0% 10%

1.5%

GDP Growth (Annual Rate)

More recently, the U.S. GDP peaked in Q3 2016 at 3.5% and then sank to just 0.7% in Q1 of 2017. At the same time, the SEI growth rate also peaked in Q3 2016, and in the last 6 months the SEI has cooled slightly to an average annual growth rate of 16.1% from a breakneck pace of 21.6% in the previous six months.

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The slowest period of growth for the SEI, in late 2012 and 2013, aligns with a similarly challenging time for the American economy during the gradual but tepid recovery from the Great Recession of 2008. According to the Federal Reserve Bank of St. Louis, growth in nonresidential fixed investment suffered a discrete deceleration from $2,016 billion in Q2 of 2012 to $2,011 billion in Q3 of 2012.

SEI compared to S&P 500 Growth

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Subscription business sales have grown substantially faster than two key public benchmarks — S&P 500 sales and US retail sales. Overall, the Subscription Economy Index™ (SEI) reveals that subscription businesses grew revenues about 8 times faster than S&P 500 company revenues (15.2% versus 2.0%) and about 5 times faster than U.S. retail sales (15.2% versus 3.4%) from January 1, 2012 to March 30, 2017.

THE SUBSCRIPTION ECONOMY INDEX ™ VERSUS S&P 500 SALES GROWTH

SEI Growth (Annual Rate)

KEY FINDINGS

1.0% 5% 0.5%

0%

Q2 2016

Q3 2016 SEI Growth (Left Axis)

Q4 2016

Q1 2017

0.0%

GDP Growth (Right Axis)

A comparison of SEI growth (left axis) versus American GDP growth (right axis). Note that the SEI generally tracked with the overall GDP slowdown at the end of 2016, but has since accelerated.

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Subscribed Magazine, Fall 2017  
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