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Subscription is a long-lasting, predictable revenue stream. Even if one-off sales bring more revenue the subscription system fares much better. I was listening
by shubhamjain 9y ago
Subscription is a long-lasting, predictable revenue stream. Even if one-off sales bring more revenue the subscription system fares much better. I was listening to Sam Harris' podcast recently, and they seem to have discontinued the one-time donations entirely. You don't want to deal with the instability of exceedingly high revenue one month, and barely any in the other.
Another thing I noticed is that with subscriptions in place, you can understand—and grow—your customers in all sorts of ways. For eg, Netflix has analyzed that "if you have watched 15 hours of content per month, you're 75% less likely to cancel. If they drop below 5 hours, there is a 95% chance they will cancel." [1] So, now, they only have to figure out how to hook their users to watch Netflix for that many hours. I don't think it's very much possible in a traditional business setting.
[1]: https://blog.kissmetrics.com/how-netflix-uses-analytics/ https://blog.kissmetrics.com/how-netflix-uses-analytics/