New threats to the subscription model

Koenigsberg, O (2022) New threats to the subscription model. MIT Sloan Management Review, 64 (2). pp. 1-4. ISSN 1532-9194

Abstract

Subscriptions have all the hallmarks of a can't-miss revenue model. Customers love how they lower their barriers to access, while companies embrace their simplicity and ease of communication. Investors prize them because they generate more predictable long-term-revenue flows than conventional one-off transaction models. Proponents of the so-called subscription economy -- a term coined by the CEO of platform provider Zuora -- argue that customers are better served by subscription experiences built around services than by static offerings or a single product. Software giant SAP asserts that a subscription model shortens time to market and speeds delivery of services to customers, in addition to accelerating cash collection and enabling businesses to define and modify pricing models.