Customers are finding new ways to reach subscription businesses. Are we paying enough attention to what happens before they arrive?
SIGNAL OF THE WEEK
How customers reach a subscription business can change long before subscriber growth shows a problem.
We work hard to bring potential subscribers through our front doors and convince them to join. We test offers, improve signup experiences, measure conversion and track what happens after customers subscribe.
But how much attention are we paying to the route they took to reach us?
That route isn't necessarily what it used to be. Someone may discover our brand inside another company's app, on their television, through a partner, in AI chats and summaries, or through a search engine that's sending fewer visitors than it once did.
And each route has different economics. Depending on the arrangement, someone else may control the purchase, billing or information we receive about those customers. We may gain access to an entirely new audience, but have less control over the relationship we're trying to build.
This week's news shows how differently companies are responding to these changes. Some have been investing in new ways to reach their audiences and build more direct customer relationships. Others are seeing the effects of relying on acquisition channels that aren't delivering what they once did.
We can't assume that the channels that brought us customers yesterday will continue to work the same way tomorrow. And finding a new source of subscribers isn't necessarily a win if those customers cost more to acquire, are less likely to stay, or leave us with less control over the relationship.
It's worth looking beyond how many new subscribers we're bringing in and asking where they're coming from, what it costs to acquire them, who's influencing their decision to join, and how those relationships may be changing.
We've spent years making it easier for customers to walk through our front doors. Maybe it's time to pay just as much attention to the roads that lead them there.
STORIES BEHIND THIS WEEK'S SIGNAL
People Inc. and The New York Times: Two Responses to Changing Search
People Inc. lost nearly 70% of its Google referrals, but revenue from businesses beyond website visits is growing. The New York Times added 420,000 digital subscribers while investing in products that give customers reasons to return directly. Two approaches to reducing dependence on how people find content online.
Read: People Inc. Grows Despite 70% Drop in Google Referrals
Read: New York Times Adds 420K Digital Subscribers
LegalZoom: When Fewer Customers Enter the Business
Subscription revenue grew 11%, even as business formations, a major source of future subscribers, fell 13%. LegalZoom is investing in new acquisition channels, including partnerships and AI-driven discovery. The concern is how today's slowdown in new customers could affect recurring revenue months from now.
Read: LegalZoom Grows Subscription Revenue Despite Fewer Units
Roku: Becoming the Place Where Subscriptions Begin
Roku generated more than one million streaming sign-ups during the World Cup across participating services. Now its new advertising tools aim to help streaming partners bring more customers into their own apps and accounts, with early campaigns meeting or beating acquisition-cost targets. The opportunity is clear, but advertising through Roku and selling subscriptions through its marketplace have different implications for costs, billing and customer relationships.
Read: Roku's World Cup Streaming Sign-Ups
Read: Roku Launches New Subscriber Acquisition Tools
Vox: Bringing the Audience Closer
Vox's website audience has declined while its video and newsletter audiences have grown. Its new mobile app brings those audiences together and introduces them to paid membership. The challenge is turning people who enjoy free content across different platforms into customers willing to pay.
Read: Vox Launches App to Grow Paid Membership
ALSO ON THE RADAR
PRICING & PACKAGING
Duolingo Drops Its Highest-Priced Subscription Tier
When the AI processing cost of a feature falls from 30 cents to less than a penny per use, does it still belong in a premium tier? Duolingo is moving Video Call into its less expensive Super plan, making it available to far more subscribers.
Hinge Tests a Cheaper Way to Convert Free Users
Hinge is testing a lower-priced plan and targeted discounts to turn more free users into paying customers. Early conversion results are encouraging, but average revenue per paying user has declined. Can more subscribers make up the difference?
MEMBERSHIPS & PARTNERSHIPS
Lyft Replaces Pink With New Membership Plans
Lyft is trading automatic ride discounts for credits toward future purchases and adding DoorDash benefits. The credits expire after 60 days. Will broader benefits encourage members to spend more, or leave existing subscribers missing what they originally paid for?
TECHNOLOGY & AI
Recharge and Skio Change Subscription Platform Pricing
Recharge's entry price is rising from $99 to $149 a month, while Skio's Scale transaction fee increases to match Recharge's 1.25% plus 20 cents. Six months after the acquisition, the changes raise questions about costs and which merchants the platforms are targeting.
Five9's $325M AI Acquisition Opens Another Sales Route
Five9 is buying Level AI, whose software works alongside competing customer-service platforms. Subscription businesses such as Ollie and Smartsheet already use the technology. Will Five9 preserve that flexibility as it brings the products under its ownership?
Thomson Reuters Finds Revenue on Both Sides of AI
Products incorporating generative AI now account for 34% of Thomson Reuters' annualized contract value. Reuters also earned approximately $19 million from AI content licensing last quarter. Two different ways AI is becoming a revenue opportunity, with different economics.
COMPLIANCE & SUBSCRIBER TRUST
Bloomberg to Pay New York $500K Over Subscription Practices
New York challenged Bloomberg's promotional pricing disclosures, automatic renewals and cancellation practices. The settlement requires refunds for eligible subscribers and changes to how Bloomberg sells and manages subscriptions. Another example of state regulators using existing laws to scrutinize the entire subscriber experience.
QUESTION FOR YOUR TEAM
If your largest source of new subscribers became significantly less productive next quarter, how quickly would you recognize the problem?
And do you have another reliable way to reach customers, or would you be starting from scratch?
INSIDE THE MEMBER CENTER
NEW THIS WEEK: TWO PAYMENT RECOVERY VENDOR BRIEFS
When a renewal payment fails, a subscriber who intended to stay can still be lost. Our two new vendor briefs examine different approaches to protecting that revenue, including where each service fits, pricing, implementation and questions operators should ask.
Revaly: Subscription Technology Vendor Brief
Formerly FlexPay, Revaly works on failed-payment recovery and, through certain integrations, payment approvals before a decline. See what it may add to existing billing and processing tools, along with documented customer results and what remains unconfirmed.
Vindicia Retain: Subscription Technology Vendor Brief
Vindicia Retain pursues recurring payments left unpaid after a business's existing recovery efforts. The brief covers how merchants submit transactions, integration options, performance-based fees and what to verify before adopting it.
Explore the Vindicia Retain Brief
ALSO IN THE MEMBER CENTER
Failed-Payment Recovery: What Has Changed for Subscription Businesses
Understand why recurring payments fail, where different recovery tools fit and how to measure results without adding unnecessary cost or customer friction.
Subscriber Acquisition Channel Assessment
This week's Signal asks where new subscribers come from. Use this framework to compare acquisition sources by retention, subscriber value and economics, not just sign-ups.
Explore the Channel Assessment
All four resources are available to Subscription Insider members.
See What Subscription Insider Membership Includes
That's it for this week,
Kathy
Kathy Greenler Sexton
CEO & Publisher
Subscription Insider®
