The entertainment industry has been complaining for years about its staggering losses due to piracy. However, even as the video, game, and music industries have evolved toward subscription and streaming business models, they continue to generate significant profits. Media firms still say that rampant thievery is costing them billions -- over $50 billion in 2017! Where’s the resolution to this conundrum?
Michael Moran Alterio is Subscription Insider’s staff writer focused on subscription business trends and research. He is a journalist and data analyst with over 20 years of experience with a keen sense for the story behind the spreadsheet.
LinkedIn, Slack, DropBox, Pandora, Spotify, and just about every mobile video game are generating revenue despite a business model that includes most of their customers using their services for free. Clever developers and content producers have learned that attracting A LOT OF customers can be as important as attracting PAYING customers. And the most clever are finding innovative ways to derive real value from the users who pay nothing at all.
Ad revenue for newspapers has been falling for years, but the migration of ad dollars, especially to Facebook and Google, are pushing news orgs away from ad-based revenue models.
Credit cards are a blessing and a curse for subscription publishers and monthly box merchants. Yes, auto-pay on a regular basis is sweet indeed, but it comes with the peril of card default. Cards expire or max out, customers dispute charges, and more ... but there are ways to minimize the detrimental effects of credit card declines and chargebacks on your subscription business.
Several trends are colliding in the business of funding political campaigns. Increasingly polarized voters are expressing their opinions not just with votes but also with individual donations. Candidates are enabling this level of participation with invitations to make affordable, easy donations monthly, or even weekly. And organizations and businesses are making it easy for would-be politicians to make this happen.
Credit card transactions have topped three and a third TRILLION dollars. With that volume, even a tiny percent of misfires create problems on the order of hundreds of millions of dollars. Companies that depend on card transactions, especially those who depend on recurring payments, need to be proactive in preparing for pitfalls.
In the age of the Internet, and especially since the Great Recession of 2008, the value proposition of print advertising has faded, only partly replaced by online digital advertising, and even that seems shaky. Instead, some media companies and information publishers are looking at ways to monetize their audience directly with the option to subscribe to new, premium products that may replace or co-exist beside legacy magazines.
Sell a printer and you get steady income from sales of ink cartridges. Sell a meal-kit subscription and you get steady income from the food boxes you send your subscribers. Both enjoy recurring revenue streams; in fact, there are some striking parallels between these two ways of doing business. But what can executives in both learn from each other?
For February 2018, lovers were forecast to spend $6 billion on Valentine's Day purchases of candy, flowers, and clothing. But that's a market that may be willing to spend on romance during the other eleven months of the year as well. And in fact, a number of companies are working hard to serve these products -- yes, even undies -- on a recurring basis.
This US$4.7 billion meal-kit business is predicted to grow to $11.6 billion by 2022. But before that happens, competition will thin the ranks of a crowded marketplace. Analysts say that the winners will be the ones who ally with much bigger players, such as Amazon and Walmart.