[Future of Subscription Economy] #2. Usage based Business Model is the Next Wave

CHAPTER 2. Subscription is dying and Usage based model is Next Wave

Welcome to the second chapter of the “evolution of subscription business model.” Today, let’s finally find the answer to the question I raised at the very first of the last video. “Why subscription-model is ‘dying’ and usage-based pricing is the ‘Next wave’?”

In the last video we have talked about subscription business model itself. Without any doubt, the subscription-based business model provides a unique set of advantages both from a customer perspective as well as business and its stakeholders. The nature of subscription business model, which focuses on flexibility and experience, caters perfectly to the shift in customer behavior that favors access over ownership.

But the customers started to feel the “subscription fatigue” and realized that the fixed subscription pricing is unfair. Think about Netflix, the price is fixed no matter how many movies you watched this month. One movie; set price. Dozens of movies; same price. Perhaps the biggest is that customers often purchase the license that they never use.

So, the customers started to find the better solution than the fixed price subscription services. Now the era of usage or consumption-based business model is started.

The shift away from buying boxed software toward subscriptions was one of the biggest innovations of the cloud era to date. That was truly the giant shift. But there is a new model that is winning converts and distribution the status quo. It’s time for make a huge innovation again.

Then, let’s get started.

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