The podcast delves into the growing trend of subscription-based models across industries, skepticism towards life becoming all subscription-based, implications on economic disparities and consumer experiences, strategic branding in market focus, promotions and sponsor advertisements, rise of gaming subscriptions, evolution of pricing strategies, and challenges in taxing subscription services.
Gaming industry showcases subscription growth, with platforms like Microsoft acquiring Activision Blizzard highlighting surge in adoption.
Consumer fatigue in subscription services rising, attributed to oversubscription, lack of new content, and nickel-and-diming pricing structures.
Deep dives
Subscription model in the gaming industry
The gaming industry has experienced tremendous growth in subscription services over the past five years. Platforms like Microsoft acquiring Activision Blizzard show the surge in subscription adoption. With triple growth in subscriptions since 2015, gaming services provide latest games, previews, and bonus content, appealing to a wide audience.
Consumer fatigue in subscription services
Recent data indicates consumer fatigue in subscription services, where cancellations outpace new subscriptions. Streaming services like Netflix and HBO Max saw a 49% cancellation rate in 2022. Factors like oversubscription, lack of new content, and fatigue with nickel-and-diming pricing structures contribute to this trend.
Transitioning from three options to two in subscription pricing
Traditionally, offering three subscription options was standard practice, but with the shift to subscription models, offering two tiers might suffice. The focus is moving away from scope of work differentiation to value-driven tiers tailored for different business stages or service levels. Tiers based on lifecycle, expertise, or freemium might streamline subscription offerings.
The impact of flat rate pricing and premium benefits
Flat rate pricing models with premium benefits offer predictability to users and align with the insurance effect, where users are willing to pay a premium for guaranteed coverage. The flat rate pricing bias encourages simplicity and ease for consumers, reducing the feeling of being nickel-and-dimed with additional charges and enhancing the overall subscription experience.
We can't believe it has been since February of 2022 that we have done a subscription-economy update. (Check it out at http://thesoulofenterprise.com/378.) We are glad to be sneaking this one in just under the wire for 2023. Ron and Ed will share their latest thinking on the progress (or regression) of subscription pricing both in the professions and in the broader market including both business and consumer. As usual they will come loaded for bear. It will be a challenge to listen to this one at double speed.
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