"Startups, subscription pricing & risks: It’s not an easy opportunity"+ more

By  Recuro
Nov 30th 2022
Read time: 
4 minutes
Table of contents
Weekly News Roundup
1. Mercedes locks faster acceleration behind a $1,200 annual paywall - The Verge

Back in July, BMW raised a bit of a ruckus when the company announced that it would be making heated seats a luxury option for an additional $18 per month. Now, Mercedes aims to take the concept one step further by announcing that buyers of the company’s new Mercedes EQ electric models will need to pay a $1,200 (plus taxes and fees) yearly subscription to unlock the vehicles’ full performance.

“The subscription doesn’t come with any physical hardware upgrades — instead, it simply unlocks the full capabilities of the vehicle, indicating that Mercedes intentionally limited performance to later sell as an optional extra.”

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2. Almond launches full-service OB-GYN care subscription to rebuild patient experience - Techcrunch

The American startup Almond is aiming to modernize obstetrical-gynecological (OB-GYN) care with full service and more comprehensive than the standard provider offers. Fresh out of tech accelerator Y Combinator, the company just announced a $7 million seed round.

“Almond charges users a $250 annual subscription fee and will bill insurance for the visit and labs. The subscription will provide patients access to the company’s platform, care team and personalized plans. Though the company did say individuals without insurance can seek treatment for an out-of-pocket cost.”

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3. Younger Americans are listening to more non-music (like podcasts and news) than ever - Nieman Lab 

A new study shows more young Americans are listening to news, podcasts, and audiobooks than ever before. Nearly all of that growth comes from listening on digital devices like phones, computers, smart speakers, and internet-connected TVs — and not AM/FM radio.

“While the share of Americans listening to spoken word audio increased across all age groups, it increased the most for those ages 13 to 34, the report found. That age group now dedicates 26% of its listening hours to spoken word audio (instead of music) — up from just 12% in 2014.”

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4. Fiat CEO teases subscriptions, car-sharing for all-electric 500e launch in US - Techcrunch

The automotive company Stellantis plans to “explore alternative business models,” such as subscriptions and car sharing, when it launches its all-electric Fiat 500e in the U.S. in the first quarter of 2024, says Fiat CEO Olivier Francois.

“The exec did not rule out limiting the 500e’s U.S. launch entirely to subscriptions come early 2024, saying: “Maybe you will never have a price. Maybe it will just be usership. Maybe there will be there will be a combination of both.””

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Weekly Analysis Roundup

1. How Harvard Business Review becomes more valuable in times of economic distress - Adweek

The 100-year-old publisher, synonymous with the business case study, has lately become a model of sustainable media itself, due in large part to a burgeoning digital subscriptions business and an increasingly diversified revenue stream, topping 116,000 digital subscribers since launching a new subscription model in 2019.

“Covering issues such as the return to office and managing through a recession have drawn in readers looking to navigate those issues in their own career, and the three-year-old paywall has helped convert frequent readers into subscribers. “We are not trying to do news—we are nobody’s first-read,” Ignatius said. “That means we have to provide very actionable advice.””

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2. Commentary: "App subscription fatigue is quickly ruining my smartphone" - Digital Trends

“I miss the days when I could just pay once for an app or game and then use it forever, as long as it was on my device or was downloadable from the app store I downloaded it from”, writes Christine Romero-Chan in Digital Trends, in a lament over the number of apps choosing the freemium model instead of a pay once model.

“If you take a look at the App Store nowadays, you’ll find most apps and games are “free,” but the moment you open them, they’ll pester you with a subscription model of some kind. It’s something that litters countless apps in 2022. I’m so over the subscription-based business model, and I know I’m not the only one.”

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3. Twitter would need 64 million subscribers to replace existing revenue and cover losses - Forbes

To move Twitter off of ad revenue entirely, the company would need just over 64 million subscribers at $8/month. On a platform with just 238 million monetizable users according to Twitter’s most recent public earnings filings, that would be quite a feat, writes Forbes.

“If Twitter can keep ad revenue per user basically where it has been, at about $5/user/quarter, Twitter only needs a hair under 24 million subscribers, or one in ten, to buy into its $8/month plan.”

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4. Startups, subscription pricing & risks: It’s not an easy opportunity - WRAL TechWire

On the startup side, service subscription companies are springing up everywhere, sometimes under the two-sided marketplace model, other times as an alternative to traditional service offerings with a no-frills approach to offset the cost and increase the demand. But It’s not an easy opportunity, writes Joe Procopio, Chief Product Officer at Get Spiffy.

“A vast number of mistakes get made when a startup just tries to slap a subscription pricing model on an existing product or service. The hard truth is that the offering has to undergo a number of changes — in everything from how it’s transacted to how it’s fulfilled — to become an entirely different product or service.”

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