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In recent weeks, we’ve heard growing concern from magazine and newspaper publishers regarding the challenge of providing content for mobile media while preserving their print franchises. The concern is nothing new, but it’s apparent that content providers are at risk of losing track of their customers like toddlers in a shopping mall. Apple’s iPad success and the imminent release of new application distribution platforms from Google and other software companies threaten another seismic shift for publishers that may have far greater impact on their business models than the growth of free media on the web. Devices like the iPad offer consumers a rich reading experience and offer publishers even more targeted advertising, but the revenue tradeoff as publishers navigate the path from print to this new world is lopsided–and not in a good way.
Apple, Google and the Publishers: Here’s How to Make Subscriptions Work | John Squires | Voices | AllThingsD
Startup Killer: the Cost of Customer Acquisition | For Entrepreneurs
In the many thousands of articles advising entrepreneurs on what they have to focus on to build successful startups, much has been written about three key factors: team, product and market, with particular focus on the importance of product/market fit. Failure to get product/market fit right is very likely the number 1 cause of startup failure. However in all these articles, I have not seen any discussion about what I believe is the second biggest cause of startup failure: the cost of acquiring customers turns out to be higher than expected, and exceeds the ability to monetize those customers. In case you are not familiar with the importance of Product/Market fit, Marc Andreessen has a great blog post on this topic: The Pmarca Guide to Startups, part 4: The only thing that matters . In this blog, Marc argues that out of the three core elements of a startup, team, product, and market, the only thing that matters is product/market fit.
I'm on a redeye to NYC, supposed to be working on a presentation i'm giving in a few hours... but fuck it, i can't get this outta my head, so here we go. Over the past 10 years, we have seen a massive shift in advertising from CPM to CPC-based advertising. This basically started happening when the 2000-2001 dotcom implosion blew the market cap of Yahoo to smithereens, and display advertising went into the shitter. Altho CPM subsequently recovered, Google's IPO and the gradual emergence of CPC as a higher-quality advertising medium has been the dominant story of the first half of the last decade. There's still a lot of page views and CPM advertising out there -- and YouTube & Facebook are making sure that doesn't change -- but as we VCs like to say:
Subscriptions are the New BLACK. (+ why Facebook, Google, & Apple will own your wallet by 2015) - Master of 500 Hats
In previous analysis columns, we've tried to demystify some of the analytical tools used by successful catalogers. Profitable and growing companies know and understand the marketing, database, and numbers side of the business well and use the techniques to manage their their mailings and build their customer contact strategy. But a surprising number of companies don't regularly calculate some of the fundamental industry measurements. At the very least, you need to determine how much it costs to acquire a customer from various media such as rental lists, space ads, package insert programs, trade shows, and card decks. You also must calculate the lifetime value (LTV) of these customers. Advertisement
Setting Your Price for Customer Acquisition Costs
Netflix Raises Rates Again: Business Model Has Serious Challenges Ahead | The Business Of Online Video
Today, Netflix announced that they are raising rates on monthly plans that allow customers to get unlimited streaming and one DVD out at a time. The plan which originally cost $9.99 a month will now cost $15.98 a month. In addition, the company is now splitting out streaming only plans from DVD plans and consumers can get an unlimited streaming plan for $7.99 a month, or one DVD out at a time for $7.99 a month.Subscription business model - Wikipedia, the free encyclopedia
Membership fees to some types of organizations, such as trade unions , are also known as subscriptions. Industries that use this model include mail order book sales clubs and music sales clubs, cable television , satellite television providers with pay-TV channels, satellite radio , telephone companies , cell phone companies , internet providers , software providers , business solutions providers, financial services firms, fitness clubs , and pharmaceuticals , as well as the traditional newspapers, magazines and academic journals . Renewal of a subscription may be periodic and activated automatically, so that the cost of a new period is automatically paid for by a pre-authorized charge to a credit card or a checking account. In the U.S., recurring card charges must be disclosed in writing to the cardholder at least 10 days before each charge. [ 1 ]
E-Commerce News: Trends: The Subscription Economy
One of the main obstacles standing in the way of making the concept of subscriptions practical to more types of goods and services is that many products don't immediately lend themselves to cheap and easy billing systems. Subscriptions can play a greater role in our economy if only we can get the business model right. There are multiple ideas about the shape of the future competing for primacy in the electronic village. I am pushing on sustainability, but another idea that I really like is called "the subscription economy," championed most vociferously by Tien Tzuo, CEO of Zuora . Subscriptions fit well into Tzuo's company plan, since his company has a billing and payments system for subscription purchases. But there's more to it than a self-serving motto, and I think the subscription idea feeds nicely into the idea of sustainability.