This article glosses a very important piece of subscription revenue - churn. Just because a customer paid last month doesn't mean they'll pay this month. This is why it's important to understand "Lifetime Value", i.e. customer lifetime X subscription price.
It turns out that high LTV is correlated closely with high customer acquisition cost. That means getting people to convert to your service is -hard-. I'm surprised this isn't mentioned in the "disadvantages" part.
I also think it's silly to write an article on subscriptions as a business model and then mention examples that don't use subscriptions at all.
I think his main point was that producing a product that people want as opposed to a non-scaling service is the way to go for financial security.
I think he might have just gone with subscriptions in his examples because it's the best understood way to make money online since it's obvious who is getting paid and when. This is in contrast to ad-based, virtual-goods, or skimming off transactions.
The article as a whole was a bit short, generalized and simplistic for my liking.
Comments
This article glosses a very important piece of subscription revenue - churn. Just because a customer paid last month doesn't mean they'll pay this month. This is why it's important to understand "Lifetime Value", i.e. customer lifetime X subscription price.
It turns out that high LTV is correlated closely with high customer acquisition cost. That means getting people to convert to your service is -hard-. I'm surprised this isn't mentioned in the "disadvantages" part.
I also think it's silly to write an article on subscriptions as a business model and then mention examples that don't use subscriptions at all.
I think his main point was that producing a product that people want as opposed to a non-scaling service is the way to go for financial security.
I think he might have just gone with subscriptions in his examples because it's the best understood way to make money online since it's obvious who is getting paid and when. This is in contrast to ad-based, virtual-goods, or skimming off transactions.
The article as a whole was a bit short, generalized and simplistic for my liking.