The subscription business model has been a mainstay of the media industry for decades. It’s also recently become popular in a number of other sectors, including fashion, hospitality, travel, and more. This is no surprise, considering companies that offer subscription services grow at 5x the rate of businesses that don’t use this model.
In this article, we’ll explore how subscription models need to evolve in the future to remain successful. We’ll also discuss 4 key changes publishers must undertake to meet the needs of their desired subscribers.
Today’s subscription landscape
While subscriptions were gaining ground among consumers even before the COVID-19 pandemic, the public health crisis and resulting stay-at-home orders created a trend that is proving to have longevity.
“The UBS financial services firm predicts that the ‘subscription economy’ will grow to $1.5 trillion by 2025, more than double the $650 billion it’s estimated to be worth now,” according to this article by the Washington Post. “[For example], subscribers to Apple’s various services for fitness, games, music, and podcasts have increased by 145 million in the past year.”
Today, the average American consumer uses 2 or 3 subscription services, and their choices continue to grow. As a result, consumers want to be empowered with flexibility, particularly when it comes to the decision to end a subscription.
One common misstep companies make with their subscription models is taking the Hotel California approach: ‘You can check out any time, but you can never leave.’ Today’s consumers can see through this tired, old tactic—and it will often cost you their business.
“Federal Trade Commission regulators are looking at ways to make it harder for companies to trap consumers into monthly subscriptions that drain their bank accounts, attempting to respond to a proliferation of abuses by some companies over the past few years,” reported the Washington Post.
As a publisher, legal crackdowns aren’t the only reason you should steer clear of the Hotel California approach to subscriptions. Your time is better spent delivering personalized value to customers and building trust with them.
Steering the subscription ship forward
Now that we’ve briefly covered the current subscription landscape, let’s dig into 4 key factors that will set the subscription models of the future apart from their outdated counterparts.
- Evolve from a one-size-fits-all sausage machine of acquisition
Operating with a one-size-fits-all subscription model—where pushing numbers through the top of the funnel in hopes that subscribers fall out the bottom—is a losing game for publishers. While customer acquisition is important, it’s also essential to focus on the customer lifetime value of your current subscribers and to prevent churn, not by locking subscribers into contracts, but by offering high quality content and an excellent customer experience.
- Respect the consumer and give them choice
How can you give the consumer what they need? You first need to understand them, put yourself in their shoes (after all, you are a consumer, too), then present them with subscription offerings that are attuned to their needs.
Although every consumer’s needs are different, media organizations now have the technical ability to gather and leverage data to deliver the right content at the right time to each unique reader, viewer, or listener. This enables potential subscribers to see the value in your offerings. Then, at the right moment, you can present them with an offer specific to their preferences.
- Build an engagement loop
Once a consumer becomes a subscriber, engage with them regularly to reinforce the value of the choice they’re making to do business with you. If the time comes when they no longer see that value, make it easy for them to change or cancel their subscription. Focus on the customers who see value in your products, as they will enhance the value of your organization in turn.
- Evolve your products to stay relevant and interesting
Invest in subscription ecosystem technology that makes it easy to understand and engage with your customers. Your tech must be able to draw on a variety of data sources, organize the data, and combine those sources in a positive way that enables you to create flexible and engaging offers to each customer throughout their lifespan as a subscriber. This will help you stay top of mind with your market, and ahead of your competition.
Leveraging technology for the future
To grow their subscription businesses, publishers need to provide audiences with the content they want to consume in the way that they want to consume it—and continuously reinforce the value of that content. The key is to simplify your tech stack and get clear on the objectives that your subscription solution should help your media organization achieve.
Lineup’s Amplio subscription management platform empowers publishers to move away from a one-size-fits-all subscription strategy and grow their revenue by developing highly personalized subscription offerings.
With Amplio’s unified customer data repository and robust functionality, you can create and adjust packages on the fly to respond to the changing needs of your audience. Explore how Amplio can help your media organization.