Let's talk


May 18, 2016 | Authored by: Vindicia Team

Can an old news publication survive on a subscription model?

It seems British lawmakers see the benefit of converting to a subscription billing model. According to The Telegraph, Culture Secretary John Whittingdale published a white paper stating the British Broadcasting Corporation should try a funding method more sustainable than license fees. He, like other industry professionals, understands that the business environment has changed and that adding services on a subscription billing model could only benefit the programming company.

The BBC has been funded by license fees since its founding in 1922, so this would be a major change for the corporation. The fees will remain in place until 2027. However, they will rise in line with inflation until 2022, at which point they'll be reexamined. Whittingdale also called on the publishing and broadcasting company to provide more original content that is noticeably distinctive from its competitors. Government research had found the BBC's products, including BBC One, Radio 1 and Radio 2, was too similar to its rivals. In his paper, Whittingdale asked the BBC "to act in the public interest, serving all audiences with impartial, high-quality and distinctive media content and services that inform, educate and entertain," according to The Telegraph.

Combining subscription billing and quality content

Subscription management has been in use by various other organizations for many decades. Recently, subscription billing has proven itself to be the best payment method for Internet-based services like over-the-top content, online publications and the Internet of Things. When businesses set these recurring bills at a price that customers find reasonable, they're practically guaranteed a consistent source of revenue.

"Subscription billing can fund any product that needs consistent revenue."

As Cloud Strategies mentioned, subscription billing provides for greater growth than licensed models. While the publication talked specifically about software as a service, subscription billing can fund any product that needs consistent revenue. Profit from the accumulation of one-time payments varies over time at best. It varies considerably, but companies offering subscriptions can more accurately predict and, if they maintain the same subscribers, sustain these profits. In addition, a steady source of critical funds allows businesses to establish, maintain and update products and services that run 24 hours each day. Even the highest possible amount of one-time payments wouldn't provide enough money to sustain these products long-term.

Still, a company can't survive on this payment method alone. What it offers to consumers - whether that's television programs, written articles or software - must be valuable enough for people to agree to pay for.

Whittingdale's paper noted that providing unique programming separates a business from its competitors, but this isn't exactly how companies themselves should see it. Standing out from the competition is definitely an advantage, but more importantly, distinctive content of high value helps bring and keep new customers. Therefore, the key to success on a subscription model is to provide quality content at a price that funds ongoing services and that consumers can agree with.

About Author

Vindicia Team

Vindicia Team

We value our subject matter experts and the insights each of them brings to the table. We want to encourage more thought leaders to come together and share their industry knowledge through our blog. Think you have something interesting to contribute as a guest blogger? Contact us at info@vindicia.com