Learn from some of the most successful subscription businesses
Subscription poV #12
By Morten Suhr Hansen
These days, I am putting the finishing touches on a whole new book, coming in September. ’The Subscription Movement and How to Succeed In It’ is the title of the book that follows ‘How to build a subscription business’ that was published first in 2014 and in a second edition in 2019.
So why am I writing a new book about the huge subscription movement that is taking over countries and industries? Because the development is happening so fast! And we are starting to feel that there are almost no companies alive right now, who aren’t thinking about how to strengthen the relationship with their customers and build certain, recurring revenue streams. What lies behind this development, I attempt to uncover in my new book.
At the same time, it’s always about learning from the best and getting inspired, so in the book, I list 50 subscription companies from all over the world that I think have been the most interesting and noticeable throughout recent years. And of course, there are some well-known players on it. On the list, you will find household names like Amazon Prime, Netflix, Spotify and Dollar Shave Club
However, in addition to these, I have collected some lesser-known subscription successes that highlight the width and prevalence of the subscription-based business model and how it is changing industry after industry.
So, here is a little taste of 10 lesser-known stories on my list of the 50 most interesting subscription companies right now:
Adobe is the world’s largest provider of creative software solutions and is famous for services like Photoshop and Acrobat Reader. In 2013, Adobe made a drastic decision of changing its business model from traditional licenses, to pure subscriptions (software-as-a-service). That makes Adobe one of the world’s largest subscription companies and the switch has been an enormous success: The stock price has increased eightfold since 2013.
Barkbox is a must-have subscription for man’s best friend: The dog. That is, at least, if the dog lives in the US, where the subscription is offered. Every month, the dog and its dog parents get a box filled with surprises, in the form of dog toys and treats. At the same time, a range of other services are offered, like BarkBuddy – a kind of ‘Tinder for dogs’. More than one million subscribers testify of a desire to spoil their beloved furry friend.
Vi er vant til at abonnere på alt lige fra biler til cykler og briller. Snart kan vi også abonnere på vores møbler. Det er allerede en realitet i USA, hvor Feather tilbyder sine abonnenter forskellige abonnementspakker på møbler til dagligstuen, spisestuen eller soveværelset. Abonnenter kan vælge mellem kortidsleje eller abonnementer med længere løbetid.
We are used to subscribing to everything from cars to bikes and glasses. Soon, we will also be able to subscribe to our furniture. This is already a reality in the US, where Feather offers its subscription packages on furniture for the living room, the dining room or the bedroom. Subscribers can choose between short-term rental or a subscription with a longer timeline.
De fleste eksempler her kommer fra privatmarkedet, men abonnementsbevægelsen ruller også i industrien. Verdens største producent af trykkerimaskiner, tyske Heidelberg, tilbyder nu sine maskiner i abonnement. I stedet for at købe en trykkerimaskine kan man nu abonnere, hvor kunderne for en fast, månedlig betaling får adgang til print og service på maskinerne. Dog ikke verdens billigste abonnement, priserne starter typisk omkring en million kroner om måneden!
Most of the examples mentioned here, come from the private market, but the subscription movement is also developing on industrial markets. The world’s largest producer of printing machines, German Heidelberg, now offers their machines on a subscription plan. Instead of purchasing an expensive printing machine, you now have the ability to pay a recurring, monthly fee for access to print and service on the machines. However, this is not the cheapest subscription out there – prices start at around 150,000 dollars a month!
Headspace is meditation, made simple. Headspace is an app for your smartphone, that gives access to a wide variety of meditation lessons and other exercises that help you relax in your everyday life. Stressed? Sleepless? Nervous? Then Headspace can help you, like they are already helping more than 2 million subscribers around the world.
Would you like to learn how to cook from Gordon Ramsey? Or learn photography from Annie Leibowitz? Or perhaps, you’d like to learn how to play chess from Garry Kasparow? If so, you need a subscription to Masterclass – the American combination of a learning- and streaming platform. For around 20 dollars a month, you get access to more than 100 online learning experiences. In April 2021, Masterclass was valued at 3.2 billion dollars. There is money to collect in learning subscriptions.
MUD Jeans is a sustainable subscription service from The Netherlands and they deliver jeans in a circular concept, where you subscribe to your jeans, instead of owning them, by returning jeans when you are in need of a new pair. The returned jeans are repaired or recycled. So MUD Jeans is an example of how an otherwise reviled fashion industry can work on new and sustainable subscription concepts.
Pillpack is an American online apothecary, where customers can collect all of their different prescriptions and make sure that the medicine is delivered and renewed automatically. Subscribers can even add non-prescription products to their subscription and get them delivered at a regular frequency as well. Pillpack makes it easy to be a medicine user and apothecary customer and in 2019, Amazon delivered a huge check and became the new owner for Pillpack.
Strava might not be as unknown as other companies mentioned here, since the service is frequently used by cyclists and other athletes, who use the service for planning and documenting their workouts and to network with friends and other athletes. A mix of gamification and networking services has been a succesful cocktail for Strava that now have around 80 million users worldwide.
Another digital learning platform enters the list, this time in the form of Finnish subscription success, Yousician. Here, future musicians can learn to play the guitar, the piano, the bass or the ukulele. For only 25 dollars a month you get access to all of the necessary tutorials. Right now, Yousician has 20 million subscribers, which makes the service the largest music teacher in the world.
The rest of the list, you will get when my book launches. And, as always, you are welcome to tip me about other interesting subscription companies that I haven’t yet discovered.