My Amazon Prime subscription expires tomorrow. A while ago, I started to cancel it and paused when I saw this message. For USD 119 a year, not only do I get 1-2 day (sometimes same-day) no-cost deliveries made to my US address, I also have access to Amazon Music, Movies, Books and photo cloud storage. That, and a host of other peripheral benefits I have not used in the last 7 years.
Amazon just reminded me that they have a compelling value proposition that now has me rethinking my decision. But beyond Amazon, there’s a host of other companies whose business models are centred on this novel approach. Outside Internet Service providers (who still collected all four months while we hibernated), I can reel off some of the countless others just looking at my phone screen. I have numerous paid subscriptions: Audible, Apple Music, Cloud Storage, Zoom, Netflix, Google Hangouts, The Economist, et cetera. Even the New Vision. That last one I am cancelling without an iota of regret; their idea of digitization is scanning (literally) the printed newspaper! And the fellow tasked with this is too lazy to walk over to the high-resolution office scanner; he uses his low-grade phone scanner. Many days am unable to read entire articles altogether.
So much for my people’s lacklustre delivery. Have you considered that everything that’s sold will soon be vended with a monthly plan? The current global crisis is accelerating us into this new reality at lightening speed. The subscription-based pricing has had an annual growth rate of more than 100 percent in the last 10 years, never mind that it has been around since the 1600s, having been pioneered by forward-thinking book publishers.
And if you think that your potato selling business cannot pivot to the subscription economy, think again. You see, we have always touted selling as a transaction. What we do not realize is that people buy outcomes – the intrinsic value of the product on the shelf. The potato seller should, therefore, ask: What is my customer’s actual need? How can I make it easier for him to be fed? That opens up a whole new array of possibilities. I suspect we are going to see many subscription-based companies emerge even in the tradition-steeped industries like transportation (airlines particularly), education, hospitality and logistics. Standing on a precipice, even the old captains of industry are looking for answers. And the Subscription-based pricing is one.
Question 1: What Subscription-based app do you have on your phone?
Question 2: What opportunities (around you) do you see for the subscription-based business model?