Is Micro-Subscription the next revenue model?
How can companies get past ad-based revenue model?
Building successful products is impossible without developing a successful business model.
Facebook and Snapchat make money by tracking your activity across various websites and apps to show you targeted ads. In contrast, companies like Amazon and Walmart already have a wealth of data about their users simply from the time they spend on their websites or app. This data is fully owned by Amazon and Walmart and cannot be taken away by phone manufacturers like Apple.
With the changes in privacy regulations, the data that these companies collect through their website and app will become even more valuable for targeted advertising, not just for Amazon and Walmart but for other retailers as well. Ad-funded business models have become increasingly risky in light of the rise of privacy features on social media platforms and browsers. As a result, companies are searching for alternative ways to monetize their products and services.
It's understandable that many users don't want to encounter a paywall when accessing news, entertainment (such as games, videos, and audio), social platforms, and productivity tools. However, the number of people willing to pay for subscriptions in these categories is still relatively small.
Netflix, gyms, video games, electric scooters, Tinder: Almost everything can now be bought under a monthly payment model. And, by and large, interest in the subscription economy shows no signs of slowing down.
But now we’re onto the next chapter: Welcome to the age of micro-subscriptions. This model allows users to pay small amounts on a recurring basis for access to premium content or features.
Micro-subscriptions can provide a more stable revenue stream, one that also gives companies the option to hike prices on consumers as a way to bolster revenues.
Smaller payments work at getting us to pay for a product or service — something that we might have previously been getting for free or as part of an otherwise bigger package of services
This approach has several benefits, including a more predictable revenue stream and a closer relationship with customers.
Still, there are some industries where, for now at least, micro-subscriptions seem to be a distant dream. You’d be hard-pressed to find a major publisher that will let you pay to read just a single news article. And car subscriptions still haven’t quite taken off.
Perhaps this is inevitable given the larger budgets up for grabs in a corporate B2B context, but it’s still potentially worth exploring what micro-subscription opportunities might be available for your product.
Are there segments that are unable or unwilling to pay B2B SaaS prices and might be willing to pay for a micro subscription?
Are there opportunities for add-ons to be sold as a micro subscription?
Are there specific features of your product you could package into a micro-subscription?
The future of micro-subscriptions may be a distant dream but it's very promising. Let me know your thoughts.