The subscription economy is experiencing spectacular growth, with global revenues expected to reach 2.1 trillion US dollars by 2034.

Nevertheless, this expansion masks inefficiency: the very unbundling that drives consumer choice appears to be hindering the productivity gains that digital transformation promised.

From Warsaw to Prague, emerging European markets are witnessing this paradox as traditional industries fragment into countless subscription offerings.

The unbundling imperative

Industries are fragmenting at speed. Where consumers once purchased bundled services—a newspaper subscription including sports, politics, and classifieds—they now select from hundreds of specialised offerings.

European subscribers average 3.2 subscriptions each, trailing American counterparts at 4.5, yet appetite for more remains strong.

This extends far beyond media. Polish software companies exemplify the trend. Booksy, which began as a Warsaw software development firm, evolved into a specialised SaaS platform for beauty salons—carving out a narrow slice of what was once bundled business management software.

DemoBoost meanwhile focuses solely on product demonstrations, whilst Doctor.One provides virtual consultations through subscription healthcare.

The productivity paradox emerges

This fragmentation creates what economists call the productivity paradox—where technological advancement fails to translate into measurable productivity gains.

First identified by Nobel laureate Robert Solow in 1987, who observed computers were, “everywhere except in the productivity statistics,” the paradox has resurged in the subscription era.

The mechanism is pernicious. When businesses switch from integrated solutions to multiple subscription services, they experience subscription overwhelm.

Companies now use an average of 130 SaaS applications, many redundant across departments. Time saved by individual applications is consumed by managing multiple subscriptions, billing cycles, and integrations.

The economics of fragmentation

The subscription economy’s growth masks fundamental economic tensions. Whilst global subscription revenue is projected to reach 1.5 trillion US dollars this year, the model creates winner-take-all dynamics that concentrate value in platforms rather than individual services.

Netflix captures more value than the content creators it hosts; subscription management platforms like Chargebee profit from the complexity that unbundling creates.

This concentration is acute in emerging markets. Polish streaming services face the same challenge as American counterparts—competition from global platforms whilst dealing with fragmented local content. The result is a pricing race to the bottom, with digital subscription churn rates averaging 4.1 per cent monthly.

The productivity trap

The paradox deepens when considering modern work. Knowledge workers increasingly spend time managing subscription portfolios rather than producing output. European research shows 46 per cent of subscribers are annoyed by managing multiple subscriptions across different platforms.

This friction translates into lost productivity—the opposite of what digital transformation promised.

The trap is acute for small enterprises across Central Europe. A typical Czech manufacturing firm might subscribe to separate services for accounting, inventory management, customer relations, and communications. Each requires onboarding, training, and maintenance.

The cognitive load of managing these systems often exceeds their efficiency gains.

The consolidation response

Some companies are escaping this paradox through re-bundling. European telcos are positioning themselves as aggregators, with 38 per cent of subscribers willing to pay higher mobile bills for bundled content subscriptions. Microsoft’s Office 365 demonstrates how comprehensive platforms can capture value that fragmented solutions cannot.

Yet re-bundling faces resistance. Consumer behaviour has shifted toward personalisation and choice. Polish consumers, having experienced targeted solutions’ efficiency, resist returning to one-size-fits-all approaches. The challenge is creating platforms that offer breadth without sacrificing the specialisation that made unbundling attractive.

The measurement problem

Part of the productivity paradox stems from measurement difficulties. Traditional metrics fail to capture qualitative improvements that subscription services provide.

When a Romanian logistics company switches from perpetual software licences to subscription-based fleet management, monthly costs appear higher despite improved functionality and reduced maintenance overhead.

Previous McKinsey research suggests productivity gains from digitisation could reach two per cent annually over the by 2028, with 60 per cent coming from digital technologies. However, these gains may be obscured by the overhead costs of managing increasingly complex technology stacks.

The path forward

The great unbundling presents both opportunity and risk for emerging European markets. Countries like Poland, with strong software development capabilities, are well-positioned to create integration tools that resolve the productivity paradox. The key lies in building platforms that maintain specialisation’s benefits whilst reducing management overhead.

The subscription economy’s evolution suggests current fragmentation may be transitional rather than permanent. As artificial intelligence and automation reduce the friction of managing multiple subscriptions, productivity gains from unbundling may finally materialise.

The reinvention imperative

Subscription models require fundamental reinvention of operations, not merely billing changes. The most successful firms will either master integration or position themselves as essential nodes in the fragmented ecosystem.

The productivity paradox is not permanent—it signals that digital transformation remains incomplete. As emerging European markets continue embracing subscription models, the companies that thrive will solve the paradox rather than endure it.

The great unbundling, in other words, is merely the prelude to an even greater reintegration.

Photo: Dreamstime.