Subscription Services for a Continuous Revenue Stream

As physical-world tangible products and services are being transitioned to the online world or as new online products and services are created in the digital world, the prevailing trend is to seek subscription service pricing as opposed to traditional pay-once pricing. The subscription model has better revenue yield due to the recurring nature of subscription charges.

Consider the revenue yield of selling an eBook as compared to selling a subscription service through your membership website. Which option would you choose if you had a choice? You may choose to do both which is fine but the business case analysis will indicate advantage to the subscription model.

In the software industry, enterprise pricing models have migrated to the subscription model where corporate business is seeking profits in the tightened marketplace. As desktop computing is migrating to web services, the subscription model particularly makes sense. It is a service for which recurring charges can be applied in order to continue receiving the service.

Another consideration is to offer a free service for the basic version of the offering and upsell the service with a subscription fee for advanced features. This approach is prevalent in software downloaded for installation on the desktop computer or as web based services.

Subscription or Membership Service Ideas

  • Image Hosting for Social Networking
  • Online Magazine Publishing (may be a Blog)
  • Stock Market Charts
  • Self-Improvement Blogs
  • Games and Puzzles

Many if not most service ideas are not unique. If it is something worth doing, someone will already have started it. If it is really big, then the biggest players in the industry will be doing it (e.g. Yahoo Finance which includes stock market services, Image Hosting by Flickr). Do you think Google AdSense is the only ad network in existence? It happens to be the biggest and most dominant but it is not the only ad network.

If one were to only penetrate areas which are not already served, that would be a non-starter. Seeking niche areas is a prudent strategy to narrow the playing field. Finding highly demanded, lowly served areas is a motherhood statement but it applies, although it may be hard to determine such areas. Building a smaller community sometimes works in favor of the smaller operator which can be more innovative and agile when compared to the 900-pound gorillas of the industry.

Sometimes just the right variation on the theme at the right time is all it takes for something to take off.



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