“Why companies are setting prices wrong, and how to do it right”+ more

By  Recuro
Feb 8th 2023
Read time: 
3 minutes
Table of contents
Weekly News Roundup
1. Yamaha invests heavily in Swedish-Finnish boat subscription service – Dagens industri

Skipperi, a sharing service for leisure boats in the Nordics, bags an investment of nearly SEK 80 million and expands to Australia and the USA. The company has grown quickly since the beginning in 2017 and now has 400 boats in six countries.

“The subscription cost is currently SEK 12,600 per season. Users then get unlimited access to boats in Skipper’s own fleet for six months.”

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2. OpenAI launches ChatGPT Plus, starting at $20 per month – Techcrunch

Aiming to monetize what’s become a viral phenomenon, OpenAI has launched a new pilot subscription plan for ChatGPT. Called ChatGPT Plus and starting at $20 per month, the service delivers a number of benefits over the base-level ChatGPT, OpenAI says, including general access to ChatGPT even during peak times, faster response times and priority access to new features and improvements.

“OpenAI previewed the launch of ChatGPT Plus in early January, announcing that it was “starting to think about how to monetize ChatGPT” and publishing a survey that outlined the potential pricing for — and features of — a “ChatGPT Professional” plan. Then, a few weeks ago, several ChatGPT users reported being granted access to a pro tier that cost $42 a month, which in retrospect appears to have been in error.”

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3. Movs launches new electric bikes in Sweden – Dagens industri 

Movs, a company offering electric bikes via subscription, has decided to scrap their plans for an European expansion to focus solely on the Swedish market – where they are launching two new subscriptions.

“Only last year did the brand step into the more public arena with its subscription service where you can subscribe to either a bicycle, an electric bike, an electric moped or an electric scooter – either on an unbound 30-day subscription or for a year.”

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4. Apple services have more than 935 million paid subscriptions – Apple Insider

In the quarterly earnings announcement, Apple said that the number of subscriptions across its platforms increased from 900 million to 935 million just in the last quarter. Apple counts every subscription made through the App Store and its services since they all provide a source of revenue for the company.

“[The total number of subscribers] includes Apple services, entertainment apps, and app subscriptions originating from the App Store, like Carrot Weather and Ivory. Apple TV+ and Apple Arcade are also included in these numbers.”

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Weekly Analysis Roundup

1. Recurly releases its 2023 State of Subscriptions report – Recurly

Recurly, a direct-to-consumer subscription management and recurring billing platform, has released its 2023 State of Subscriptions report, based on data from more than 2,200 Recurly merchants that support more than 55 million active monthly subscribers around the globe.

“Firstly, the report reveals that successful subscriber acquisition is three-fold, emphasizing pricing, packaging, and promotions. In 2022, consumers took advantage of almost 35M free trials globally from 851 participating subscription sites managed by Recurly’s merchants alone. Overall, the average site-level conversion rate was 38.1%, demonstrating that consumers are more likely to try new services if those services include a discount or trial.”

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2. At The Seattle Times, 70 percent of revenue now comes from readers – WAN-IFRA

The last decade, the Seattle Times has moved away from ad revenue and toward readership revenue. Today, the magazine has roughly 80,000 digital subscribers. Reader revenue (also from print) now accounts for 70 percent of turnover. In this interview with WAN-IFRA, the magazine’s longtime chairman Alan Fisco shares his learnings from the transition.

“You can have the most sophisticated funnel, the best retention tools on the planet, spend a fortune on your tech stack, but if your content is bad, if you’ve gutted your newsroom, if you’re publishing two or three local stories a day, I say save your money on all your retention efforts because you’re still going to fail.”

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3. How subscription businesses can bolster cash flow and customer retention in tough economic times – Tech Native

In the current economic climate, characterized by slowing growth, the lingering effects of COVID-19 and tightened regulations, cash is more important than ever, writes Tech Native.

“To cushion the impacts of inflation, businesses will need to monitor their cash conversion cycles more closely than ever. And staying ahead of your competition means eliminating inefficiencies that leave money on the table.”

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4. Why companies are setting prices wrong, and how to do it right – Bloomberg

Inflation has companies charging customers more, but experts say it offers businesses, including subscription companies, a chance to rethink their entire pricing model, writes Bloomberg.

“A subscription, in a nutshell, is a quantity discount,” says Oded Koenigsberg, professor of marketing at the London Business School, who says he sees this and other pricing “inefficiencies” everywhere he shops.”

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