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Brands Evolve in their Approach to Subscription Billing

For brands selling digital goods and services, subscription billing is the best way to monetize the service. As such, companies evolve their approach to subscription billing by adjusting and making choices on their sources of revenue.<br>Read how brands change and modify their subscription billing approach. Know more about subscription billing solutions: https://www.vindicia.com/solutions/subscription-billing/

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Brands Evolve in their Approach to Subscription Billing

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  1. Brands Evolve in their Approach to Subscription Billing © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential. 1

  2. Brands Evolve in their Approach to Subscription Billing Subscription billing is one of the best ways to monetize a digital service, but it can be challenging to settle on a rate that is effective for both users and the business. As a result, companies often adjust their sources of revenue over the years, often making a few surprising choices along the way. Netflix and WhatsApp both recently announced significant changes to their subscription options, with Netflix upping its rates and WhatsApp eliminating them altogether. Netflix raises rates for HD Netflix just bumped up its subscription fee from $7.99 to $9.99 per month for HD streaming users. The starting subscription price for HD has been $9.99 for some time now, but now those who are on grandfathered plans will also have to pay up, The Next Web reported. Users who want to remain at the lower rate will have to sacrifice screen clarity and go for standard definition instead. Many are already criticizing the choice, believing it may alienate some of Netflix's most loyal users. According to the Next Web, with rising competition in the streaming video space, it may not be smart to increase prices now. According to the publication, Netflix doesn't expect an unusual amount of churn as a result of the decision, but it remains to be seen whether the brand's expectations are correct. 2 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  3. Netflix will raise prices for grandfathered subscribers. 3 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  4. WhatsApp eliminates subscription fees Meanwhile, WhatsApp, a cross-platform messaging service, recently announced on its blog that it will eliminate subscription fees on its platform, raising the question of how the Facebook-owned company will continue to sustain its service. At 99 cents per year, the subscription fee was never substantial to begin with, and users are only required to pay it after a full year of free service. However, the company still ran into issues with its customer base. For instance, many users don't have a debit or credit card number, which made it difficult to sustain their accounts after the first year. While you might assume WhatsApp will substitute third-party ads for its subscription revenue, the company argues this won't be the case. Instead, it will partner with other companies to allow these businesses to communicate with WhatsApp users through the platform. As Business Insider pointed out, this "app-within-an-app" approach mirrors that of Chinese messaging app WeChat. "The app-within- an-app model could be the future of mobile." WeChat allows users to access many different services within its service, including the ability to hail taxis, purchase movie tickets and even donate to a charity. Essentially, this enables users to make in-app payments. In other words, rather than gaining revenue from consumer subscribers, WhatsApp will likely switch things around to gain recurring payments from businesses that want to reach consumers through the app. 4 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  5. The change represents an interesting shift and also demonstrates a new potential direction for the app environment. According to Venture Capital firm Andreesen Horowitz, the app-within-an-app model could be the future of apps and mobile commerce. For instance, the WeChat app hosts millions of apps in its ecosystem, much like the Internet hosts Web pages. Powered by subscription billing In a rapidly changing digital environment, companies need the support of a versatile subscription billing platform that can evolve with them, whether they need to increase fees or change to a different form of revenue generation. Moving from traditional subscription billing to micropayments could be extremely difficult without the right software to back you up. In addition to versatility, it's crucial that companies can utilize user data to make informed decisions regarding any substantial changes to their subscription billing fees. Subscription-based models could be the future of payments, but it's important for brands to invest in high-quality partnerships to make it happen. 5 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  6. About the Author: Bryta Schulz Bryta joined Vindicia in 2013 and serves as Senior Vice President of Marketing. She is responsible for building brand awareness, creating go-to-market strategy and promotion, and driving growth. With over a decade of executive level marketing, product management and PR experience, Bryta has led marketing teams in enterprise technology and SaaS companies. Her experience includes heading product marketing at GoGrid, PGP, RSA and Symantec and business development and product management positions at Xcert, Thales, and Persistence Software. Bryta holds a MA in Translation from the Johannes Gutenberg University Mainz and an MBA from the University of Reutlingen. Visit our Blog for more information. 6 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  7. Thank You Like us on Facebook facebook.com/vindicia Follow us on Twitter @Vindicia Connect with us on Linkedin linkedin.com/company/vindicia © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential. 7

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