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Nationaal Uitgeefdag 2012
Justin List - Media Specialist - Zuora Timo Zuidgeest - Media Specialist - PossibilIT BV
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eCommerce has revolutionised purchasing habits and transformed the way that services are consumed. The proliferation of web channels and development of converged devices means that today’s purchases are more likely to be transacted online and provided as a subscription service.
Yes and No
The subscription economy. Something New?
“ For the first time ever, The Financial Times is reporting that the number of digital subscribers has eclipsed the number of print subscribers and half of sales from the Financial Times’ group is generated from digital revenues ”
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The subscription economy. It’s all about.
Starting ARR – Churn + ACV = Ending ARR
Starting Annual Recurring Revenue
Customers that leave you
New customers & subscription upgrades
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Subscriptions
The subscription economy. The new things
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Today publishers must deliver:• Choices.• Flexibility.• Value.• Responsiveness to differentiate.• A customer experience that open doors to future
opportunitites.
The subscription economy and Media
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This is the value of media Subscriptions
Shares of Gannett, New York Times, McClatchy and E.W. Scripps are up between 36% and 63% over the last 12 months, compared to 13% for the S&P 500
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What’s Next – Subscriptions 2.0
• No longer a transactional or pay upfront model.• Definition of subscription has changed, it’s not just a print
subscription in a digital world.• Subscriptions are now dynamic and customers demand
flexibility - Not about simple annual plans and pre-pay.• Needs to think about new business models; new ways to
monetize those relationships.• Goes beyond just paywall, requires holistic understanding of
the customer relationships, and manage it from commerce, billing, and finance.
• Need to move faster, deliver different revenue strategies.
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Subscription
Upgrade
Add-on
Bundles
Subscription Journeys
Renew
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What are Subscriptions 2.0? Cross content bundling (news, video, data, apps)
• The economics of the media industry have changed from the fixed costs of the print cycle to the varied cost of multiple media.
• Customers are used to consuming media across multiple channels , even for the same information.
• Being able to segment and cross-sell content across various channels opens up new possibilities on bundling and segmenting.
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Single Product
Simple Monthly Recurring
Multiple Currencies
International Growth
Different Billing Frequencies
Product Upgrades
Revenue Enhancement
Add-On Products
Product Expansion
Product Bundles
Pricing Optimization
Pricing Tiers
Usage & Overage
A/B TestingRegional Pricing
Subscription Business Maturity Curve
LAUNCH PIVOT SCALE
Launch
GROW
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Digital Content enables Subscription Strategies for growth in the Subscription Economy
1. Freemium2. Multiple Editions3. Promotional4. Pay-as-you-Go5. Overage6. Volume/Tiered7. Bundling8. Segmentation
Strategies
Revenue Growth
Churn DefenseLower Customer
Acquisition Costs
Competitive Advantage
MarketShare Capture
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Example #1 Freemium Upsell Strategy
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Example #2 Multiple Edition Strategy
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Example #3: Promotional Strategies
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Start with a free trial.
Annual Subscription
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Example #4 #5 On Demand, User and Usage based pricing , Pay as you go, Overage
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Example #6: Tiered / Volume Pricing Strategy
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Differential pricing based
on tiers/ volume.
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Example #7: Bundling Strategy
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Create flexible
pricing & packaging bundles.
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Example #8 Segmentation (content, location, customer…)
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A/B Test Everything
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In Summary
1. Your customers are changing , your subscriptions need to adapt to them.
2. With digital there is huge opportunity for new predictable revenue streams.
3. Agility and speed to market are key.4. Revenue Diversity, multiple income streams.5. Upsell, cross-sell- add-ons, bundles, premium
subscriptions.6. Optimize. Digital content can be segmented (content,
location, audience, subjective theory of value). 7. A/B Test price!!8. Price agility.
