Sat. Apr 20th, 2019

Why subscription services triumph | Trends

Why subscription services triumph | Trends


We live in the era of the inexhaustible supply of consumption and the subscription economy sneaks into any conversation about new business models or consumption. "The property is dead," say the gurus, "access is the new imperative, we will pay more, consume more and have less," they conclude.

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Subscription services are not a new invention, but, now, they live their golden age

To some, when talking about this issue we come to mind the editorial collections, home sales, or those first subscriptions to videoclubs. Let's say that all that was the germ of a model that has grown and evolved to the leading position it occupies today.

Subscription services are not a new invention, but, now, they live their golden age. This fever for subscription services is driven by three factors. The first is the price and the flat rate concept, the well-known open bar: I pay my subscription and consumption when and how much I want. The second is the user's experience: from the technological accessibility, to the personalization of content and functionalities. That is, I choose what content (previously selected according to my interests), where (devices, double screen, connections ...) and how to consume it, in a range of possibilities unthinkable a few years ago. The third factor is the possibility of sharing account, something that has viralized its use and popularized the subscription as a habit of consumption for all generations of users. Pay one and enjoy the whole family.

Price, relevance and user experience technology: that is the winning triad that would explain that today we pay to listen to music, watch series and movies, access certain media, read books and novelties or have advantages in home delivery or other services. We subscribe to link more, worry less or entertain ourselves better. Today, Spotify has 96 million subscribers worldwide, Netflix is ​​close to 140 million and Amazon has exceeded 100 million subscribers. Let the one who is subscribed to more than one raise his hand: the truth is that we are the majority.

Although subscriptions come from far away, the emergence of new business models based on them is not a passing trend. The economy of the subscription is becoming a main way to consume products and services and opens a new range of opportunities for those companies capable of adapting, combining or enriching their current business model with a model of this type. An example of this trend is Surfair, a Californian airline that offers a monthly subscription travel solution.

When you can not compete on price and experience is homogeneous in all services, the value will be the content

In the future, when it is no longer possible to compete on price and when the experience is homogeneous in all services, the value will be the content again. Digital niche and specialized services will re-emerge, with content boutique absolutely unique in the market. They know it well the entertainment industry and the media, which they find in the boom of subscription and payment for quality content a key business model for its development. Ask him if not Apple, Disney and WarnerMedia, three giants that have already announced that they will be the next ones to get on this train of subscription services.

Cyrille Thivat is General Manager of Telecoming

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