SlideShare ist ein Scribd-Unternehmen logo
1 von 20
Downloaden Sie, um offline zu lesen
12 vital elements of the
Subscription Business Model
(for innovators)
From Simon+Kucher Consumer
Insights magazine, spring 2016 (pdf)
The subscription
business model
delivery products &
services on a
subscription basis.
And it has found its
way into everything
we daily consume.
Customer Business
1 Access to intangible assets: software, media,TV shows, music, movies,
ebooks, magazines, video,TV shows, games, Software as a Service (SaaS)
2 Access to durable goods: cars, bicycle, smartphones (with contracts)
3 Regular delivery of goods: newspapers, clothing, toiletry, consumer packaged
goods and any other consumer goods
4 Utilities: internet, phone contract, electricity, computing power, Infrastructure as
a Service (IaaS). Note, many utilities providers use a combination of subscription
business model and pay-per-use
1 1 1
Regular delivery of goods & services for recurring payment
(1) Value & quality
(2) Clear offers & fair pricing
(3) Convenient transactions
(4) Improve offer continuously
(5) Localise offering
(6) Personalise
(7) Build a culture of membership
(8) Make deeper connections
(9) Freemium to get started
(10) The right metrics
(11) Funding sources
(12) Cost structure
12 Vital Elements of the Subscription Business Model
(1) Provide value and quality
- Refrain from (purely) regurgitating the same-old
- Add exciting, industry-leading, price-winning exclusive flagship offers
- Amend your flagship offers with the same-old
Netflix: from DVD / streaming provider to producer of their
own exclusive shows
(2) Clear offer & fair pricing
- Make clear offers
- Avoid options-overkill (typically 3)
- Make the different pricing clear & fair
Foxtel (AU):
- 26 options —> overkill
- Disingenuous disaggregation of channels
- Massive price gap between entry and full package $26-$137
- Lock-in contracts: previously acceptable, now obsoleting
Netflix:
- 3 options only
- Differences are clear to understand
- Transparent and fair price range ($9-$15)
(3) Offer convenient transactions (example: Dollar Shave Club)
- Easy payment
- Any time: cancellation, upgrade, downgrade
- Skipping of month
https://www.dollarshaveclub.com/how-it-works
1 Exclusively shows
(Amazon Prime TV)
2 Monthly “What’s
new” MS-Office
3 Varying recipes on
food subscriptions
(4) Improve your offering continuously:
- From big-bang product roll-outs to continuous evolution
- This has impact on your R&D roadmap and processes
(5) Localise your offering
- One size does (no longer) fit all
- More relevant offerings
“Narcos told Brazilians that Netflix
is paying attention to Brazil and
paying attention to talent we have
here. It’s also elevating local talent
to the world.”
https://www.bloomberg.com/news/
features/2017-01-12/netflix-wants-
the-world-to-binge-watch
(6) Personalise
- Create personalisable elements in your offering
- Higher customer engagement
- Soft switching barriers
myFT let’s you personalise
what you are interested in
(7) Build a culture of membership
- Increases direct network effects
- Increase loyalty & customer lifetime value
(8) Make deeper connections through values alignment
- Ambitious goal - bigger than profit making
- Deeper connection with customers
- No longer competing on price only
Blue Apron aims to build a better food system which.These foods are
then used in their subscription model recipes and food delivery
(9) Freemium: get started!
- As a means of trial
- To create a networked effect
- To serve as a marketing channel
Spotify: Freemium vs Premium
(10) Measure the right metrics
- Future recurring costs & revenues
- Customer lifetime value & Churn
http://www.slideshare.net/Zuora/zuora-always-on20123-saas-metrics-that-matter-12301579
(11) Funding sources
- Anticipate the moves of incumbents
- Expect imitators
- Have funding sources (cost of capital)
Spotify’s long slog to not-yet-profitability
(12) Cost structure
- Distribution, transaction costs, asset management, etc
- Sourcing / supply chain, infrastructure
- Differences/benefits to ownership offering
With reliable low-cost
distribution at no increased
piracy risk, monthly
subscriptions pricing
models were introduced
• Distribution: low cost via
fast-speed, broadband
internet
• Transactions: Direct
business to consumer
(intermediaries eliminated)
• Asset management: direct
licence, piracy control,
regular updates
Consumption-based pricing
was the legacy pricing
model for utilities enabled
by
• Distribution: low cost via
government-funded
infrastructure
• Transactions: business to
consumer (if privatised)
• Asset management:
consumer-owned assets
are to be purchased (e.g.
handheld, metering)
With location-specific,
wireless technologies, the
pricing model could be
extended to mobile
physical goods, incl cars
• Distribution: low cost
(compared to car rental);
location-specific
• Transactions: mobile, real-
time, business to consumer
• Asset management: GPS,
wireless, security, user
accountability
Utilities Software Car sharing
Amazon Prime is probably the
biggest subscription business model
on earth and it just got another
major boost …
The subscription business model is one
of the most promising business models
regardless if you work for an established
company or a young one.
We have free downloads for you to
develop your own innovation ideas
Click here to download:
www.InnovationTactics.com/
subscription-business-model-pdf

Weitere ähnliche Inhalte

Was ist angesagt?

Why Do Banks Need A Customer Data Platform?
Why Do Banks Need A Customer Data Platform?Why Do Banks Need A Customer Data Platform?
Why Do Banks Need A Customer Data Platform?Lemnisk
 
Implementation of Amazon Connect, Powered by Accenture (FSV306-S) - AWS re:In...
Implementation of Amazon Connect, Powered by Accenture (FSV306-S) - AWS re:In...Implementation of Amazon Connect, Powered by Accenture (FSV306-S) - AWS re:In...
Implementation of Amazon Connect, Powered by Accenture (FSV306-S) - AWS re:In...Amazon Web Services
 
How to Sell Learning to the C-Suite
How to Sell Learning to the C-SuiteHow to Sell Learning to the C-Suite
How to Sell Learning to the C-SuiteUdemy for Business
 
Evolution of Digital Marketing
Evolution of Digital MarketingEvolution of Digital Marketing
Evolution of Digital MarketingSudhir Mantena
 
2022 Insight Intelligent Technology™ Report
2022 Insight Intelligent Technology™ Report 2022 Insight Intelligent Technology™ Report
2022 Insight Intelligent Technology™ Report Insight
 
Programmatic advertising in china by daxue consulting
Programmatic advertising in china by daxue consultingProgrammatic advertising in china by daxue consulting
Programmatic advertising in china by daxue consultingDaxue Consulting
 
What is Inbound Marketing? A Comprehensive, Downloadable Training Presentation
What is Inbound Marketing? A Comprehensive, Downloadable Training PresentationWhat is Inbound Marketing? A Comprehensive, Downloadable Training Presentation
What is Inbound Marketing? A Comprehensive, Downloadable Training PresentationHubSpot
 
Marketing Quarterly Review
Marketing Quarterly ReviewMarketing Quarterly Review
Marketing Quarterly ReviewAlison Murray
 
Digital 2023 India (February 2023) v01
Digital 2023 India (February 2023) v01Digital 2023 India (February 2023) v01
Digital 2023 India (February 2023) v01DataReportal
 
Bank Digital Transformation through Open Banking
Bank Digital Transformation through Open BankingBank Digital Transformation through Open Banking
Bank Digital Transformation through Open BankingClement Hsieh
 
Digital Marketing Trends for 2023
Digital Marketing Trends for 2023Digital Marketing Trends for 2023
Digital Marketing Trends for 2023Vbout.com
 
Content Marketing Explained
Content Marketing ExplainedContent Marketing Explained
Content Marketing ExplainedRahulVerma886
 
Digital 2021 Ethiopia (January 2021) v01
Digital 2021 Ethiopia (January 2021) v01Digital 2021 Ethiopia (January 2021) v01
Digital 2021 Ethiopia (January 2021) v01DataReportal
 
The Netflix Marketing Plan Power Point
The Netflix Marketing Plan Power PointThe Netflix Marketing Plan Power Point
The Netflix Marketing Plan Power PointShawn McNail
 
Digital Business Transformation – Across Insurance Value Chain
Digital Business Transformation – Across Insurance Value ChainDigital Business Transformation – Across Insurance Value Chain
Digital Business Transformation – Across Insurance Value ChainRob Cornwell
 
The Emergence of Retail Media
The Emergence of Retail MediaThe Emergence of Retail Media
The Emergence of Retail MediaTinuiti
 
Why is Customer Data Platform (CDP) ?
Why is Customer Data Platform (CDP) ?Why is Customer Data Platform (CDP) ?
Why is Customer Data Platform (CDP) ?Trieu Nguyen
 
Market Intelligence And Strategy Development PowerPoint Presentation Slides
Market Intelligence And Strategy Development PowerPoint Presentation SlidesMarket Intelligence And Strategy Development PowerPoint Presentation Slides
Market Intelligence And Strategy Development PowerPoint Presentation SlidesSlideTeam
 
Ecommerce Management Model PowerPoint Presentation Slides
Ecommerce Management Model PowerPoint Presentation SlidesEcommerce Management Model PowerPoint Presentation Slides
Ecommerce Management Model PowerPoint Presentation SlidesSlideTeam
 

Was ist angesagt? (20)

Why Do Banks Need A Customer Data Platform?
Why Do Banks Need A Customer Data Platform?Why Do Banks Need A Customer Data Platform?
Why Do Banks Need A Customer Data Platform?
 
Online advertising
Online advertisingOnline advertising
Online advertising
 
Implementation of Amazon Connect, Powered by Accenture (FSV306-S) - AWS re:In...
Implementation of Amazon Connect, Powered by Accenture (FSV306-S) - AWS re:In...Implementation of Amazon Connect, Powered by Accenture (FSV306-S) - AWS re:In...
Implementation of Amazon Connect, Powered by Accenture (FSV306-S) - AWS re:In...
 
How to Sell Learning to the C-Suite
How to Sell Learning to the C-SuiteHow to Sell Learning to the C-Suite
How to Sell Learning to the C-Suite
 
Evolution of Digital Marketing
Evolution of Digital MarketingEvolution of Digital Marketing
Evolution of Digital Marketing
 
2022 Insight Intelligent Technology™ Report
2022 Insight Intelligent Technology™ Report 2022 Insight Intelligent Technology™ Report
2022 Insight Intelligent Technology™ Report
 
Programmatic advertising in china by daxue consulting
Programmatic advertising in china by daxue consultingProgrammatic advertising in china by daxue consulting
Programmatic advertising in china by daxue consulting
 
What is Inbound Marketing? A Comprehensive, Downloadable Training Presentation
What is Inbound Marketing? A Comprehensive, Downloadable Training PresentationWhat is Inbound Marketing? A Comprehensive, Downloadable Training Presentation
What is Inbound Marketing? A Comprehensive, Downloadable Training Presentation
 
Marketing Quarterly Review
Marketing Quarterly ReviewMarketing Quarterly Review
Marketing Quarterly Review
 
Digital 2023 India (February 2023) v01
Digital 2023 India (February 2023) v01Digital 2023 India (February 2023) v01
Digital 2023 India (February 2023) v01
 
Bank Digital Transformation through Open Banking
Bank Digital Transformation through Open BankingBank Digital Transformation through Open Banking
Bank Digital Transformation through Open Banking
 
Digital Marketing Trends for 2023
Digital Marketing Trends for 2023Digital Marketing Trends for 2023
Digital Marketing Trends for 2023
 
Content Marketing Explained
Content Marketing ExplainedContent Marketing Explained
Content Marketing Explained
 
Digital 2021 Ethiopia (January 2021) v01
Digital 2021 Ethiopia (January 2021) v01Digital 2021 Ethiopia (January 2021) v01
Digital 2021 Ethiopia (January 2021) v01
 
The Netflix Marketing Plan Power Point
The Netflix Marketing Plan Power PointThe Netflix Marketing Plan Power Point
The Netflix Marketing Plan Power Point
 
Digital Business Transformation – Across Insurance Value Chain
Digital Business Transformation – Across Insurance Value ChainDigital Business Transformation – Across Insurance Value Chain
Digital Business Transformation – Across Insurance Value Chain
 
The Emergence of Retail Media
The Emergence of Retail MediaThe Emergence of Retail Media
The Emergence of Retail Media
 
Why is Customer Data Platform (CDP) ?
Why is Customer Data Platform (CDP) ?Why is Customer Data Platform (CDP) ?
Why is Customer Data Platform (CDP) ?
 
Market Intelligence And Strategy Development PowerPoint Presentation Slides
Market Intelligence And Strategy Development PowerPoint Presentation SlidesMarket Intelligence And Strategy Development PowerPoint Presentation Slides
Market Intelligence And Strategy Development PowerPoint Presentation Slides
 
Ecommerce Management Model PowerPoint Presentation Slides
Ecommerce Management Model PowerPoint Presentation SlidesEcommerce Management Model PowerPoint Presentation Slides
Ecommerce Management Model PowerPoint Presentation Slides
 

Andere mochten auch

Android: a brilliant case for collaborative management of innovation
Android: a brilliant case for collaborative management of innovationAndroid: a brilliant case for collaborative management of innovation
Android: a brilliant case for collaborative management of innovationMurat @ InnovationTactics.com
 
Future Proof Design and the Platform Design Canvas
Future Proof Design and the Platform Design CanvasFuture Proof Design and the Platform Design Canvas
Future Proof Design and the Platform Design CanvasSimone Cicero
 
The Platform Design Toolkit v 0.1
The Platform Design Toolkit v 0.1The Platform Design Toolkit v 0.1
The Platform Design Toolkit v 0.1Simone Cicero
 
Amazon.com Business Model
Amazon.com Business ModelAmazon.com Business Model
Amazon.com Business ModelRaveena Balani
 
Strategy Presentation on Amazon
Strategy Presentation on AmazonStrategy Presentation on Amazon
Strategy Presentation on AmazonGabbi Baker
 
How to choose the right business model? by @boardofinno - @nickdemey
How to choose the right business model? by @boardofinno - @nickdemeyHow to choose the right business model? by @boardofinno - @nickdemey
How to choose the right business model? by @boardofinno - @nickdemeyBoard of Innovation
 
Amazon ppt
Amazon pptAmazon ppt
Amazon pptaftabssm
 

Andere mochten auch (10)

Android: a brilliant case for collaborative management of innovation
Android: a brilliant case for collaborative management of innovationAndroid: a brilliant case for collaborative management of innovation
Android: a brilliant case for collaborative management of innovation
 
Future Proof Design and the Platform Design Canvas
Future Proof Design and the Platform Design CanvasFuture Proof Design and the Platform Design Canvas
Future Proof Design and the Platform Design Canvas
 
The Platform Design Toolkit v 0.1
The Platform Design Toolkit v 0.1The Platform Design Toolkit v 0.1
The Platform Design Toolkit v 0.1
 
Amazon.com Business Model
Amazon.com Business ModelAmazon.com Business Model
Amazon.com Business Model
 
Amazon business model
Amazon business modelAmazon business model
Amazon business model
 
Amazon Business Model
Amazon Business ModelAmazon Business Model
Amazon Business Model
 
Strategy Presentation on Amazon
Strategy Presentation on AmazonStrategy Presentation on Amazon
Strategy Presentation on Amazon
 
Presentation on Amazon
Presentation on AmazonPresentation on Amazon
Presentation on Amazon
 
How to choose the right business model? by @boardofinno - @nickdemey
How to choose the right business model? by @boardofinno - @nickdemeyHow to choose the right business model? by @boardofinno - @nickdemey
How to choose the right business model? by @boardofinno - @nickdemey
 
Amazon ppt
Amazon pptAmazon ppt
Amazon ppt
 

Ähnlich wie 12 Vital elements of the Subscription Business Model

How to monetize and generate revenues from data services in a competitive market
How to monetize and generate revenues from data services in a competitive marketHow to monetize and generate revenues from data services in a competitive market
How to monetize and generate revenues from data services in a competitive marketcVidya Networks
 
Key Activities_updated.pptx
Key Activities_updated.pptxKey Activities_updated.pptx
Key Activities_updated.pptxRohit Joshi
 
Digital Transformation in Automotive Industry Chinese-German CAR Symposium
Digital Transformation in Automotive Industry Chinese-German CAR SymposiumDigital Transformation in Automotive Industry Chinese-German CAR Symposium
Digital Transformation in Automotive Industry Chinese-German CAR Symposiumaccenture
 
The Forrester Wave Subscription Billing Platforms Q4 2015
The Forrester Wave Subscription Billing Platforms Q4 2015The Forrester Wave Subscription Billing Platforms Q4 2015
The Forrester Wave Subscription Billing Platforms Q4 2015Erik Long
 
OTT Video Trends and Opportunity (2018)
OTT Video Trends and Opportunity (2018)OTT Video Trends and Opportunity (2018)
OTT Video Trends and Opportunity (2018)MC[CO] Labs
 
Business Transformation Agency
Business Transformation Agency Business Transformation Agency
Business Transformation Agency SOLA_Group
 
AppDirect Cloud Service Commerce 101 White Paper
AppDirect Cloud Service Commerce 101 White PaperAppDirect Cloud Service Commerce 101 White Paper
AppDirect Cloud Service Commerce 101 White PaperMadeline Titcomb
 
Channel Marketing for SaaS, Cloud, Hosting Companies
Channel Marketing for SaaS, Cloud, Hosting CompaniesChannel Marketing for SaaS, Cloud, Hosting Companies
Channel Marketing for SaaS, Cloud, Hosting CompaniesTotal Product Marketing
 
“Full Strike – using your data to hit targeting, proposition and strategic in...
“Full Strike – using your data to hit targeting, proposition and strategic in...“Full Strike – using your data to hit targeting, proposition and strategic in...
“Full Strike – using your data to hit targeting, proposition and strategic in...cVidya Networks
 
Bowen daigledionvalentine netflixcasestudy
Bowen daigledionvalentine netflixcasestudyBowen daigledionvalentine netflixcasestudy
Bowen daigledionvalentine netflixcasestudyWanda Alexander
 
How To Optimize Your Marketing Technology
How To Optimize Your Marketing TechnologyHow To Optimize Your Marketing Technology
How To Optimize Your Marketing TechnologyOgilvyOne Worldwide
 
Media buying and analytical services
Media buying and analytical servicesMedia buying and analytical services
Media buying and analytical serviceskathystivaletti
 
Smart Margin Analytics: Why Bolting on a Margin Assurance Capability to an Ex...
Smart Margin Analytics: Why Bolting on a Margin Assurance Capability to an Ex...Smart Margin Analytics: Why Bolting on a Margin Assurance Capability to an Ex...
Smart Margin Analytics: Why Bolting on a Margin Assurance Capability to an Ex...cVidya Networks
 
Smart Margin Analytics: Adding Margin Assurance Capability to Revenue Assurance
Smart Margin Analytics: Adding Margin Assurance Capability to Revenue AssuranceSmart Margin Analytics: Adding Margin Assurance Capability to Revenue Assurance
Smart Margin Analytics: Adding Margin Assurance Capability to Revenue AssurancecVidya Networks
 
Internal Analysis And External Environment Assessment
Internal Analysis And External Environment AssessmentInternal Analysis And External Environment Assessment
Internal Analysis And External Environment AssessmentTiffany Castro
 

Ähnlich wie 12 Vital elements of the Subscription Business Model (20)

How to monetize and generate revenues from data services in a competitive market
How to monetize and generate revenues from data services in a competitive marketHow to monetize and generate revenues from data services in a competitive market
How to monetize and generate revenues from data services in a competitive market
 
Key Activities_updated.pptx
Key Activities_updated.pptxKey Activities_updated.pptx
Key Activities_updated.pptx
 
Digital Transformation in Automotive Industry Chinese-German CAR Symposium
Digital Transformation in Automotive Industry Chinese-German CAR SymposiumDigital Transformation in Automotive Industry Chinese-German CAR Symposium
Digital Transformation in Automotive Industry Chinese-German CAR Symposium
 
The Forrester Wave Subscription Billing Platforms Q4 2015
The Forrester Wave Subscription Billing Platforms Q4 2015The Forrester Wave Subscription Billing Platforms Q4 2015
The Forrester Wave Subscription Billing Platforms Q4 2015
 
OTT Video Trends and Opportunity (2018)
OTT Video Trends and Opportunity (2018)OTT Video Trends and Opportunity (2018)
OTT Video Trends and Opportunity (2018)
 
Notes
NotesNotes
Notes
 
Business Transformation Agency
Business Transformation Agency Business Transformation Agency
Business Transformation Agency
 
Chp02 Trends
Chp02 TrendsChp02 Trends
Chp02 Trends
 
Public - Private partnership
Public - Private partnershipPublic - Private partnership
Public - Private partnership
 
AppDirect Cloud Service Commerce 101 White Paper
AppDirect Cloud Service Commerce 101 White PaperAppDirect Cloud Service Commerce 101 White Paper
AppDirect Cloud Service Commerce 101 White Paper
 
Channel Marketing for SaaS, Cloud, Hosting Companies
Channel Marketing for SaaS, Cloud, Hosting CompaniesChannel Marketing for SaaS, Cloud, Hosting Companies
Channel Marketing for SaaS, Cloud, Hosting Companies
 
“Full Strike – using your data to hit targeting, proposition and strategic in...
“Full Strike – using your data to hit targeting, proposition and strategic in...“Full Strike – using your data to hit targeting, proposition and strategic in...
“Full Strike – using your data to hit targeting, proposition and strategic in...
 
Bowen daigledionvalentine netflixcasestudy
Bowen daigledionvalentine netflixcasestudyBowen daigledionvalentine netflixcasestudy
Bowen daigledionvalentine netflixcasestudy
 
How To Optimize Your Marketing Technology
How To Optimize Your Marketing TechnologyHow To Optimize Your Marketing Technology
How To Optimize Your Marketing Technology
 
A new era for retail
A new era for retailA new era for retail
A new era for retail
 
Media buying and analytical services
Media buying and analytical servicesMedia buying and analytical services
Media buying and analytical services
 
Smart Margin Analytics: Why Bolting on a Margin Assurance Capability to an Ex...
Smart Margin Analytics: Why Bolting on a Margin Assurance Capability to an Ex...Smart Margin Analytics: Why Bolting on a Margin Assurance Capability to an Ex...
Smart Margin Analytics: Why Bolting on a Margin Assurance Capability to an Ex...
 
Smart Margin Analytics: Adding Margin Assurance Capability to Revenue Assurance
Smart Margin Analytics: Adding Margin Assurance Capability to Revenue AssuranceSmart Margin Analytics: Adding Margin Assurance Capability to Revenue Assurance
Smart Margin Analytics: Adding Margin Assurance Capability to Revenue Assurance
 
Internal Analysis And External Environment Assessment
Internal Analysis And External Environment AssessmentInternal Analysis And External Environment Assessment
Internal Analysis And External Environment Assessment
 
Cloudy with SaaS shine
Cloudy with SaaS shineCloudy with SaaS shine
Cloudy with SaaS shine
 

Kürzlich hochgeladen

NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023Steve Rader
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhangmcgroupjeya
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.mcshagufta46
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessAPCO
 
Intellectual Property Licensing Examples
Intellectual Property Licensing ExamplesIntellectual Property Licensing Examples
Intellectual Property Licensing Examplesamberjiles31
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHelene Heckrotte
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Onlinelng ths
 
Data skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsData skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsyasinnathani
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxJemalSeid25
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfCharles Cotter, PhD
 
Live-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarLive-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarNathanielSchmuck
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...Brian Solis
 
Mihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZMihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZKanakChauhan5
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentationbaron83
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..dlewis191
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsWristbands Ireland
 
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...IMARC Group
 

Kürzlich hochgeladen (20)

Investment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV IndustriesInvestment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV Industries
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhang
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
 
Intellectual Property Licensing Examples
Intellectual Property Licensing ExamplesIntellectual Property Licensing Examples
Intellectual Property Licensing Examples
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Online
 
Data skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsData skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story points
 
WAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdfWAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdf
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptx
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
 
Live-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarLive-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry Webinar
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
 
Mihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZMihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZ
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentation
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and Festivals
 
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
 

12 Vital elements of the Subscription Business Model

  • 1. 12 vital elements of the Subscription Business Model (for innovators)
  • 2. From Simon+Kucher Consumer Insights magazine, spring 2016 (pdf) The subscription business model delivery products & services on a subscription basis. And it has found its way into everything we daily consume.
  • 3. Customer Business 1 Access to intangible assets: software, media,TV shows, music, movies, ebooks, magazines, video,TV shows, games, Software as a Service (SaaS) 2 Access to durable goods: cars, bicycle, smartphones (with contracts) 3 Regular delivery of goods: newspapers, clothing, toiletry, consumer packaged goods and any other consumer goods 4 Utilities: internet, phone contract, electricity, computing power, Infrastructure as a Service (IaaS). Note, many utilities providers use a combination of subscription business model and pay-per-use 1 1 1 Regular delivery of goods & services for recurring payment
  • 4. (1) Value & quality (2) Clear offers & fair pricing (3) Convenient transactions (4) Improve offer continuously (5) Localise offering (6) Personalise (7) Build a culture of membership (8) Make deeper connections (9) Freemium to get started (10) The right metrics (11) Funding sources (12) Cost structure 12 Vital Elements of the Subscription Business Model
  • 5. (1) Provide value and quality - Refrain from (purely) regurgitating the same-old - Add exciting, industry-leading, price-winning exclusive flagship offers - Amend your flagship offers with the same-old Netflix: from DVD / streaming provider to producer of their own exclusive shows
  • 6. (2) Clear offer & fair pricing - Make clear offers - Avoid options-overkill (typically 3) - Make the different pricing clear & fair
  • 7. Foxtel (AU): - 26 options —> overkill - Disingenuous disaggregation of channels - Massive price gap between entry and full package $26-$137 - Lock-in contracts: previously acceptable, now obsoleting
  • 8. Netflix: - 3 options only - Differences are clear to understand - Transparent and fair price range ($9-$15)
  • 9. (3) Offer convenient transactions (example: Dollar Shave Club) - Easy payment - Any time: cancellation, upgrade, downgrade - Skipping of month https://www.dollarshaveclub.com/how-it-works
  • 10. 1 Exclusively shows (Amazon Prime TV) 2 Monthly “What’s new” MS-Office 3 Varying recipes on food subscriptions (4) Improve your offering continuously: - From big-bang product roll-outs to continuous evolution - This has impact on your R&D roadmap and processes
  • 11. (5) Localise your offering - One size does (no longer) fit all - More relevant offerings “Narcos told Brazilians that Netflix is paying attention to Brazil and paying attention to talent we have here. It’s also elevating local talent to the world.” https://www.bloomberg.com/news/ features/2017-01-12/netflix-wants- the-world-to-binge-watch
  • 12. (6) Personalise - Create personalisable elements in your offering - Higher customer engagement - Soft switching barriers myFT let’s you personalise what you are interested in
  • 13. (7) Build a culture of membership - Increases direct network effects - Increase loyalty & customer lifetime value
  • 14. (8) Make deeper connections through values alignment - Ambitious goal - bigger than profit making - Deeper connection with customers - No longer competing on price only Blue Apron aims to build a better food system which.These foods are then used in their subscription model recipes and food delivery
  • 15. (9) Freemium: get started! - As a means of trial - To create a networked effect - To serve as a marketing channel Spotify: Freemium vs Premium
  • 16. (10) Measure the right metrics - Future recurring costs & revenues - Customer lifetime value & Churn http://www.slideshare.net/Zuora/zuora-always-on20123-saas-metrics-that-matter-12301579
  • 17. (11) Funding sources - Anticipate the moves of incumbents - Expect imitators - Have funding sources (cost of capital) Spotify’s long slog to not-yet-profitability
  • 18. (12) Cost structure - Distribution, transaction costs, asset management, etc - Sourcing / supply chain, infrastructure - Differences/benefits to ownership offering With reliable low-cost distribution at no increased piracy risk, monthly subscriptions pricing models were introduced • Distribution: low cost via fast-speed, broadband internet • Transactions: Direct business to consumer (intermediaries eliminated) • Asset management: direct licence, piracy control, regular updates Consumption-based pricing was the legacy pricing model for utilities enabled by • Distribution: low cost via government-funded infrastructure • Transactions: business to consumer (if privatised) • Asset management: consumer-owned assets are to be purchased (e.g. handheld, metering) With location-specific, wireless technologies, the pricing model could be extended to mobile physical goods, incl cars • Distribution: low cost (compared to car rental); location-specific • Transactions: mobile, real- time, business to consumer • Asset management: GPS, wireless, security, user accountability Utilities Software Car sharing
  • 19. Amazon Prime is probably the biggest subscription business model on earth and it just got another major boost …
  • 20. The subscription business model is one of the most promising business models regardless if you work for an established company or a young one. We have free downloads for you to develop your own innovation ideas Click here to download: www.InnovationTactics.com/ subscription-business-model-pdf