Potential drawbacks of a subscription model for businesses could include a decrease in immediate revenue as customers pay smaller, regular amounts rather than a large upfront cost. It may also lead to increased expenses in the short term due to the need for ongoing support and updates. Additionally, customers may cancel their subscriptions if they feel they are not getting value for their money, leading to a loss of steady income for the business. Finally, the business may need to invest in new technology or systems to manage the subscription model.
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Subscription services have grown revenues 8X faster than the S&P500 and 5X faster than US retail sales. This new business model is why Adobe, Netflix,...
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In today's digital world the focus is on the individual customer not on the product, and those customers prefer outcomes over ownership. Brick-and-mortar retail is transforming, focusing on customers' online experience and using the data gleaned there to inform the stocking of physical stores. The news industry is enjoying a renaissance thanks to online subscriptions; media is in a new golden age of on-demand streaming; and car subscriptions give access to a range of vehicles from the same company. Adobe led the way in cloud-based subscription software services, overcoming the initial drop in revenue and rise in expenses to reach a position of steady growth. With the Internet of Things even heavy equipment like construction supplies can move to a subscription model by teasing out the service-level agreement that sits behind the product. The subscription access model is being used in healthcare, government, utilities, and more. The customer-focused subscription company has to break down...