The Power of Subscription

Subscription services are the present and future....mostly!

Four years ago that may have felt like a more radical statement but in 2018 it feels like a company is clinging to the past if it refuses to acknowledge this. 

It began in 2015, the music industries revenue had continually declined for almost 20 years until finally it increased by $400 million. That number doubled in 2016.

How could this be?

Physical sales were continuing to decline and the industry was going through a recession. Suddenly, streaming services took the reins and began to truly dominate. 📷People are now paying for music again because a method was found that fits the 21st centuries digital landscape. It’s converted a generation that were raised on illegally downloading music (thanks limewire and piratebay) to begin to pay for it. If that doesn’t demonstrate success I don’t know what does. In 2017 they had over 160 million active users between them with rapidly rising numbers.

The premise is simple, pay a monthly fee and have unlimited access to whatever you’ve subscribed to. The fee is withdrawn directly from your bank account and you forget you’re even paying.  Almost everyone I know has adopted this method for multiple companies and are likely to do it for more. The costs for consumers are beginning to add up and companies are reaping the rewards.

This isn’t exclusive to music either. Many businesses have realised it is a guaranteed and measurable monthly income and can potentially net more money than per product purchasing. Adobe proved this when they took a gamble and increased their revenue by making all of their products exclusively cloud and subscription based. As physical distribution declines in industries that do not require it, subscription appears to be the next way companies are drawing customers in.

Naturally, not every company will be able to apply this business model but for those that can the positives seem to be overwhelmingly outweighing the negatives.