A subscription model does not mean simplistic

Written by on December 9, 2015 in BillingViews, Opinion with 0 Comments

The subscription economy is a compelling idea. Subscriptions can bring predictable, recurring revenues. They can bring stability to business. They can offset the need for capital expenditure, at least to an extent. This is why, according to Cerillion’s recent survey of 200 companies, mid-sized companies tend to be the ones embracing the subscription model.

Most companies are, to some extent. But the key, according to the survey, and other sources (conversations with operators, industry discussion and, frankly, common sense) is not to be trapped by going down a simplistic model.

The keys, according to Cerillion, are flexibility and variety.

Cerillion DownloadRecurring revenues are great, but what if a customer wants a one-off purchase. A customer may not want to subscribe to Sky Movies, for example, but come that wet Sunday afternoon, he may well want to watch Raiders of the Lost Ark or Star Wars, The Very Beginning.

What, too, if the people getting comfortable on the sofa are not the ‘customer?’ Maybe, especially at this time of year, they are visitors or relatives. And they want to put the movie on their own credit card? They should be able to.

While company executives acknowledge the benefits of the model, 67 percent note ‘drawbacks’ with their current systems. It is, says Louis Hall, CEO of Cerillion, “one blot on an otherwise positive subscription landscape.” Winning, he says, “will depend on the success businesses have in implementing flexible pricing and payment strategies.”

There are, of course, as many subscription models as your mind allows. From video, book, film, medical care, even buying billing as a service, the list goes on and is not limited to simply buying services. YouTube is now offering a subscription for watching videos posted on the site, without adverts. And it will, doubtless, be very popular. Almost everyone you talk to would like to watch the video they choose, and not a heap of apparently ‘relevant’ adverts.

It is, without doubt, the age of the subscription economy. It is, also without doubt, a dangerous road to set off down if you think that subscription models are – or should be – simple. Far from it, the need for flexibility and variety is clear, and not just from Cerillion’s survey. And, of course, if you were thinking of looking into subscription models and the systems to support them, you might want to look at a company that comes from a more sophisticated background than a simple subscriptions one.

The survey is a very worthwhile read (short registration required) and can be downloaded here.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .


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