Super Bundling: Bangos strategy for transforming the subscription economy

Bango, a major player in mobile payments and subscription bundling, helps consumers to charge digital content and services directly to their mobile phone bills through its Digital Vending Machine technology.

In an interview with Japan Today, Bango’s Chief Marketing Officer Anil Malhotra and Senior Vice President for APAC, Andy Suzuki, share valuable insights into the rapidly evolving subscription economy in Japan and East Asia.

With 65% of Japanese consumers frustrated by managing multiple subscriptions and 68% unable to afford all the services they want, the pair argue in favor of Super Bundling — Bango’s service that seeks to simplify subscription management.

In addition, Malhotra and Suzuki provided advice for foreign companies seeking to enter Japan’s competitive subscription market, noting two major elements of success: finding a good local partner and staying in the market for the long-term.

Can you tell us more about Bango and its services?

Malhotra: Bango is based in Cambridge, England, and Andy manages our Southeast Asia operations from Tokyo. We’ve been in business for about 25 years, starting when mobile internet began to take off in Europe. At the time, we focused on figuring out how to monetize content and services on mobile devices.

Our key innovation was carrier billing, which allows consumers to charge online services directly to their phone bills. This method became widely used around the world, including here in Japan, where mobile carriers like NTT Docomo and KDDI adopted the technology. Today, Bango handles around $8-9 billion in consumer spending annually, supporting services for companies like Google Play and Microsoft.

How has the company evolved with the market?

In recent years, we’ve shifted focus toward subscription services. We’ve seen more and more consumers signing up for recurring monthly payments across various sectors — everything from entertainment and gaming to education and health. As a result, we identified an opportunity to help telcos bundle these subscriptions with their core products, such as broadband or mobile plans.

For example, Verizon in the U.S. has launched a platform called +play, allowing customers to manage around 50 different subscription services in one place. We call this approach "Super Bundling," and it offers consumers a unified way to manage and pay for multiple subscriptions, often at a discounted rate.

In the “Subscription Wars: Super Bundling Awakens” report, which explores consumer trends across Japan, South Korea and Taiwan, there’s a section on Japan. Could you talk a bit more about the subscription ecosystem here, and how it compares markets in the region?

Malhotra: Yes, Japan is an interesting market. When comparing Japan, South Korea, and Taiwan, you notice that these regions are starting to follow global trends, particularly those in North America. In the U.S., for example, many people have people have an average 4.5 subscriptions, but here in East Asia, the average consumer has around 3-4 subscriptions. Japan is lower than Korea and Taiwan in terms of subscriptions per user.

Taiwan has the highest number of subscriptions per user, and South Korea is slightly lower. However, Japan stands out because a significant percentage of subscriptions — 39% — are acquired through indirect channels, which is the highest in the world. By comparison, only 20% of U.S. subscribers use indirect channels.

Another notable trend in Japan is the strong adoption of gaming subscriptions, especially among younger consumers. There’s also a significant focus on local content, like anime and J-dramas, which plays a role in the high engagement levels we see here.

One of the most striking stats from the report was the issue of affordability in Japan. It says that 68% of subscribers are unable to afford all the services they want, which is the highest in the region.

Can you talk about how Super Bundling helps reduce costs and increase customer loyalty?

Malhotra: Absolutely. One of the main benefits of bundling is that it often provides better value than buying individual subscriptions. For instance, Verizon’s +play offers a movie bundle that includes Netflix, Showtime and Paramount for $27.99, compared to $35 if you bought them separately; that’s about a $60 saving per year.

Additionally, as services crack down on things like password sharing, bundles become an even more attractive way to get value for money. Consumers are also drawn to bundles because they simplify management—everything is consolidated into one bill.

In terms of loyalty, bundling helps reduce churn. Subscribers tend to stay longer with both their telco and their subscription services. For instance, the average duration of a subscription increases from 12 to about 18 months when part of a bundle. If a consumer has multiple subscriptions tied to their telco, they’re less likely to switch providers because it’s more complicated to move everything.

Suzuki: Yes, that's a great point. Our analysis shows that when consumers have multiple subscriptions through a telco, they’re much less likely to cancel. For example, if someone has a streaming subscription, an education service, and a fitness app bundled together, they’re much more likely to stay loyal to their telco because it simplifies their life.

That’s very interesting. We noticed in your earlier comments, Mr Malhotra, that you mentioned health subscriptions are becoming a major growth area. Could you expand on that?

Malhotra: Yes, that’s right. We’re seeing health-related subscriptions become a significant growth area globally, and Japan is no exception. These range from fitness and wellness apps to medication and supplements being offered as subscription services. It’s a whole new category that’s emerging.

Another area of growth is user-generated content platforms, such as YouTube Premium. Over the past couple of years, platforms like Patreon (a monetization platform) and Substack (an online publishing platform) have seen massive growth, allowing creators to monetize their content through subscription-based models. While this trend is still developing in Japan, I believe that over the next five to ten years, we’ll see a lot of interesting developments in this space.

Bango has been active in Japan for a while now, so what advice would you give to foreign companies looking to enter Japan’s subscription economy.

Malhotra: The key to success in Japan is recognizing that while there are similarities with other markets, the differences are just as important. First, find a good local partner—someone who understands the market and can guide you through the complexities. It’s crucial to have local expertise to help navigate everything from consumer preferences to regulatory issues.

Second, you need to invest time. Unlike some other markets, where deals can happen quickly, Japan requires time to build trust and relationships. But once you invest that time, the rewards can be substantial, and those relationships tend to last longer. There’s a lot of integrity in how business is conducted, and it’s essential to understand that you need to commit to the market​