Powering the Subscription Economy: Behind-the-Scenes Insights
By Fox Business ยท 2019-04-16
In this blog, we delve into the intricate operational activities that keep the subscription economy running seamlessly. From managing credit card transactions to revenue recognition, learn about the behind-the-scenes operations that play a critical role in sustaining the subscription model.
Qualcomm's Positive Earnings Impact and Dispute Resolution with Apple
- Qualcomm's stock is currently up 20% due to the resolution of a royalty dispute with Apple.
- The dropped litigation between Apple and Qualcomm is expected to have a positive impact on earnings for both companies.
- Qualcomm anticipates that it could add another two dollars to its earnings as a result of the resolution.
- The breaking news has been well-received in Silicon Valley, with a focus on the positive implications for the industry.
- The CEOs in the tech industry believe that the resolution will allow everyone to refocus on innovation rather than engaging in legal disputes.
![Qualcomm's Positive Earnings Impact and Dispute Resolution with Apple](https://cdn.heichat.net/files/web/heichat/blog_data/7qeGU84uaXU/segments/5/1/segment_1.webp)
Qualcomm's Positive Earnings Impact and Dispute Resolution with Apple
The Subscription Economy and Its Behind-the-Scenes Operations
- The subscription economy relies on continuous incoming revenue to sustain the business model. It's not just about selling the initial product, such as a peloton or a razor, but also ensuring that the revenue keeps flowing in over time.
- Behind the scenes, a lot of operational activities take place to support the end-users' seamless experience. This includes managing credit card transactions, handling monthly billing, and determining the recognition of revenue.
- From an end-user perspective, using subscription services may seem effortless, but the intricate behind-the-scenes operations play a critical role in sustaining the subscription economy model.
![The Subscription Economy and Its Behind-the-Scenes Operations](https://cdn.heichat.net/files/web/heichat/blog_data/7qeGU84uaXU/segments/5/2/segment_2.webp)
The Subscription Economy and Its Behind-the-Scenes Operations
The Impact of Subscription Model and OTT Services
- The subscription model allows companies to focus on providing great service while we take care of the upgrades and bundles for customers.
- However, competitive pricing is a significant threat to this model, as seen with the entry of Disney and Apple into the streaming market.
- The pricing strategy involves small differences to appeal to consumers, such as setting the price at $5.99 instead of $6 for psychological impact.
- It's important to note that despite the hype around OTT services, it currently represents only 5% of the $500 billion TV industry.
![The Impact of Subscription Model and OTT Services](https://cdn.heichat.net/files/web/heichat/blog_data/7qeGU84uaXU/segments/5/3/segment_3.webp)
The Impact of Subscription Model and OTT Services
The Future of Fender Guitars in the Streaming Era
- The Fender guitars business, known for the iconic Stratocaster, faces the challenge of adapting to the digital streaming era.
- While telecommunication companies like ATT, Verizon, T-Mobile, and Sprint use pricing and product differentiation to compete in the market, Fender's approach with expensive, high-quality guitars poses a unique challenge.
- The key question is how Fender can attract customers and adapt to the subscription model prevalent in the streaming era, especially considering the high cost of their guitars.
![The Future of Fender Guitars in the Streaming Era](https://cdn.heichat.net/files/web/heichat/blog_data/7qeGU84uaXU/segments/5/4/segment_4.webp)
The Future of Fender Guitars in the Streaming Era
The Success of Fender Play
- Fender realized that 90 percent of their customers actually stopped playing the guitar after 90 days, and they wanted to help them continue playing.
- To address this, they launched Fender Play, a program that teaches customers how to play the guitar for a simple $20 a month.
- Customers who sign up for Fender Play are sticking with it, leading to increased guitar playing and more purchases of guitars, amps, and accessories.
- The success of Fender Play demonstrates the effectiveness of supporting customers in developing their musical skills and sustaining their interest in playing the guitar.
![The Success of Fender Play](https://cdn.heichat.net/files/web/heichat/blog_data/7qeGU84uaXU/segments/5/5/segment_5.webp)
The Success of Fender Play
Conclusion:
The subscription economy relies on seamless behind-the-scenes operations to sustain continuous revenue flow. Understanding the intricate processes involved in managing credit card transactions and revenue recognition is essential for businesses operating in the subscription model.